The Smith & Williamson Enterprise Index, which measures the views and confidence of owner-managers and entrepreneurs in the UK, decreased four points to 111.4, its lowest point for 12 months with brexit worries and concerns over the state of the UK and global economy appear to be the primary cause.
Guy Rigby, head of entrepreneurial services at Smith & Williamson, the accountancy, investment management and tax group, said: “When we first sought business owners’ thoughts on Brexit, the Conservative Party had just been elected and a potential Brexit felt quite remote. However, as we approach the referendum date, business leaders are seemingly more apprehensive about the prospect of leaving the EU.”
Rigby continues, “Our respondents did, however, find some reason for cheer; 80 per cent felt that their own prospects for the next 12 months had increased over the past quarter, up 5 per cent from the last quarter. This improvement potentially highlights an entrepreneurial self-belief in spite of broader market headwinds.”
“Overall, business owners appear quite confident in their own ability to grow, with 74 per cent anticipating growth, or an acquisition, in the next 12 months. In addition, a record 50 per cent thought that access to funding had improved over the past quarter, despite only 38 per cent having an appetite to borrow.”
Trade expectations down
There were worries for businesses that export. Those who expected their turnover to increase over the coming year declined 12 per cent since the end of the last quarter. There was a concern over the financial health of trading partners, only 55 per cent believed their health was improving, a seven point decline over just three months.
Issues surrounding skills
Only 48 per cent of respondents believe there are sufficient people and skills to fill vacant positions. In particular, over 66 per cent of respondents believed the lack of STEM (Science, Technology, Engineering and Maths) skills among students was hindering the scaling-up of British businesses.
Rigby concludes, “A shortage of talent is a continuing problem for British business. Stress on the available talent pool can’t be ignored; businesses must train more people and upskill their existing workforces as capacity remains tight but, equally, employees must come with the basic ingredients. This starts with education and encouraging students to acquire skills, an area where government policy changes and educationalists can have a big impact.”
