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Equipment Finance News SME growth predictions on the rise, showing resilience in the face of Brexit Published: 15th August 2019 Share The majority of UK SMEs predict no change in growth over the next few months with some forecasting modest growth, showing an overall upturn in growth predictions according to research from Hitachi Capital Business Finance (HCBF). Offering a snapshot into SME expectations for the autumn months, HCBFs Business Barometer suggested that for the three months to 30 September, 49% of UK SMEs will hold their position, with 35% prediction growth, and only 16% forecasting contraction or decline. Gavin Wraith-Carter, managing director at HCBF (pictured above), explained: “At first glance, the results of our tracking study look similar to last quarter – but dig deeper and there are some significant findings.” Percentage of small businesses that predict net growth to 30 September – and, within this, those that predict significant expansion % that predict net growth (significant or modest/organic) % that predict significant expansion Q3 2017 40% 6% Q4 2017 38% 7% Q1 2018 39% 6% Q2 2018 41% 6% Q3 2018 36% 7% Q4 2018 36% 5% Q1 2019 36% 6% Q2 2019 34% 4% Q3 2019 35% 5% Credit: Hitachi Capital Business Finance As a division of Hitachi Capital UK, HCBF provides a range of business finance products to small and large businesses in a multitude of sectors including transport, agriculture, construction, and financial services providers. With an asset portfolio of more than £1 billion, the company product range includes hire purchase, finance lease solutions, and stocking and block discounting which are provided through brokers, vendor organisations and manufacturers. Small businesses outlook to 30 September Q3 2019 Q2 2019 Q1 2019 Significant growth 5% 4% 6% Modest / organic growth 30% 31% 30% Stay the same/ no change 49% 49% 47% Contract / slow down 10% 9% 10% Struggle to survive 6% 7% 7% Credit: Hitachi Capital Business Finance Wraith-Carter continued: “The spring months saw the first fall in small business growth predictions for a year and there are encouraging signs now that this was not the start of a seasonal slide. Second, there are some major variations by sector this summer and in six sectors some notable rises in growth predictions.” Despite the fall in SME growth predictions for Q2 in the manufacturing, construction, retail and real estate sectors, six industry sectors actually saw a rise in the number of business leaders that predicted growth. HCBF theorised that perhaps Brexit was creating work for SMEs that provide consulting services that relate to business planning, regulation and accounting, as the most significant rise in growth predictions was seen in the professional services sectors. Most notably, the finance and accounting sector saw a sharp rise in growth predictions from 33% to 48% in three months. Additionally, over the last six months the legal services growth predictions have risen from 37% to 44%. In contrast, the only sector with more SME owners predicting contraction over growth was the transport and distribution sector, falling from 38% to 27% over the last six months. “It’s also important to note that whilst transport, building and manufacturing businesses have been faced by tangible challenges from Brexit uncertainty, small businesses that provide professional and consulting services seem to be prospering,” Wraith-Carter concluded. Percentage of small businesses that predict net growth to 30 September – by industry sector – including comparative results for the previous two quarters Q3 2019 Net % that predict growth Q2 2019 Net % that predict growth Q1 2019 Net % that predict growth Q3 2019 Net % that predict contraction Finance & accounting 48% 33% 42% 11% Legal 44% 41% 37% 11% IT & telecoms 41% 38% 41% 13% Media & marketing 37% 36% 33% 22% Retail 34% 40% 31% 20% Real estate 32% 45% 28% 15% Agriculture 32% 27% 24% 23% Manufacturing 30% 38% 42% 10% Transport & distribution 27% 25% 38% 29% Hospitality & leisure 27% 29% 24% 7% Construction 26% 31% 31% 16% Credit: Hitachi Capital Business Finance Asset Finance Connect Asset Finance Connect brings you news and updates about UK and European auto, equipment and asset finance providers. Sign up to our newsletter Featured Stories NewsUS equipment finance confidence hits three-year high NewsAlba Leasing and Banca Sistema announce partnership NewsDLL and Kempower partner to drive EV charging accessibility Equipment Finance
