The majority of UK small and medium sized enterprises expect to invest in their businesses over the next three months according to research from Bibby Financial Services (BFS).
The funder surveyed 1,000 businesses with turnover of up to £25 million in June as part of its SME Tracker and 59% said they will invest in the three months up to October.
27% plan to invest in technology and equipment; 20% said they will recruit new staff and 23% said they would invest in employee training.
David Postings, Bibby Financial Services UK CEO, said: “Across the SME population in the UK this equates to 2.9 million businesses investing over the months leading up to October, which is obviously very positive for the economy.”
One in ten SMEs plan to invest in new premises – up from 8% in Q2 – and more will focus on product design than in the second quarter of the year (16% to 18%).
When asked about expectations for the months ahead, 57% said they expect to achieve sales growth and only seven% foresee a decline in orders in the three months leading up to October.
Gross domestic product estimates announced in July show the UK returning to pre-recession levels and Postings says the latest findings highlight longer-term growth aspirations among smaller businesses. He said: “These results are positive as they show owners and management teams investing in the long-term future of their businesses. The increase in those investing in new premises is a clear indication of these plans and it’s likely that the effects will be felt later in the year, which could spell more positive news in terms of GDP as we lead-up to 2015.”
Postings said he would also expect findings to be reflected in employment figures later in the year but cautioned that aspirations need to be coupled with finance to support growth: “If businesses have the financial means to grow, then undoubtedly they will need to take-on staff, move to larger premises and buy equipment and machinery, which all have a positive multiplier effect on the economy.
“But too often, ambition is stifled by cashflow issues, such as late payment or customer insolvency so having funding in place is a huge advantage and can facilitate these plans.”