SMEs ‘can power an economic recovery’

SMEs 'can power an economic recovery'

Small to medium-sized enterprises (SMEs) could be the driving force for an economic recovery in the UK over the coming months, it has been argued.

Ensuring SMEs continue to invest in the future of local communities is key to getting the country back on a positive economic footing, as many firms have been hoarding cash in recent years and it is now important that these funds are reinvested in ways that deliver long-term growth for the UK economy.

The Office for National Statistics revealed that the third quarter of last year saw a 4.3 per cent year-on-year rise in business investment. Overall, outlay for UK firms rose by 0.3 per cent on the previous three months to £30.1 billion.

The figures showed the UK’s manufacturing industry performed particularly strongly over the three-month period, with a six per cent increase on the previous quarter.

Source: http://www.taylorvinters.com/news/smes-can-power-economic-recovery/4667

10 policies for UK economic growth

Conservative MP for Dover and Deal Charlie Elphicke has set out 10 policies he wants to see introduced in the Budget to boost growth.

For supporting larger businesses he suggests:

• Reducing the main rate of corporation tax to 19 per cent;
• Abolishing stamp duty on share transactions;
• Making changes so the UK becomes the corporate headquarter centre of Europe, including a tax rule to say foreign profits or interest payments brought into the UK by subsidiary business will not be taxed or deemed to be brought into the UK and taxed if held overseas.

For smaller businesses he suggests:

• Reforming UK trade and investment to enable SMEs to expand overseas more rapidly;
• Floating the smaller businesses growth fund on the London Stock Exchange;
• Lower capital gains for business assets or expansion of entrepreneur’s relief;
• Expanding specific reliefs for entrepreneurs and small business investors

The changes he recommends for regulatory reform are:

• The extension of the new enterprise allowance;
• The creation of transition enterprise zones;
• Less stringent employment law, including capping maximum compensation claims at the level of average earnings.

Source: http://www.moneymarketing.co.uk

Barclays Report – The year ahead: a view from Britain’s small businesses

Over half of small businesses are expecting to grow their profits in 2011, driving the economic recovery, with SMEs in manufacturing, transport & communication, and financial services sectors set to lead the way. Crucially, this optimism is reflected in employment plans with broad plans to increase numbers. Many businesses seem to be waiting, their foot poised above the accelerator, for increases in customer demand in order to achieve their goals.

This report draws upon the results of a survey conducted amongst SMEs across Great Britain. The findings providenew and timely insights into the views, ambitions andplans of owner-managers for 2011.

Specifically, the focus is on three broad areas:

1. Optimism and ambitions of SMEs in the coming year – How do SMEs expect their markets to change? What are their expectations of profits? What strategieswill be used to combat the challenges of the uncertaineconomic climate and perceived barriers to recovery?

2. Investing in growth –What investments will SMEs be making in 2011 to reposition and enhance theirbusinesses, to prepare for the recovery?

3. Contributions to employment – How are SMEs planning on managing their talent? Will there be netchanges in the employment of, full-time, part-time and graduate workers and what are the characteristics of the companies where these changes are most likely totake place?

Download the full report: Barclays-Kingston

‘Small Business Needs Help to Drive Export-led Growth’

Managers of British SMEs highlight pressing need for the assistance identified in the Government’s Trade and Investment White Paper

Following the Government’s commitment to help small business export to new markets overseas, a new poll of decision-makers in 500 small and medium-sized businesses reveals that uncertainty around different regulatory systems, exchange rate fluctuations and onerous bureaucracy are the main concerns for SMEs who export or are looking to start exporting their goods and services.

The survey, commissioned by TheCityUK, the independent body promoting UK-wide financial and related professional services, revealed that 26% of small businesses see different regulatory, legal and political systems in overseas markets as a barrier to their progress. 23% are concerned about exchange rates, 22% about excessive red tape abroad and 17% by a lack of effective support in the UK. Other key concerns included cultural and language barriers (17%), lack of access to finance (16%) and inadequate information on markets and competition (15%).

Read more: http://www.freshbusinessthinking.com/news.php?CID=&NID=7401&Title=%91Small+Business+Needs+Help+to+Drive+Export-led+Growth%92

Small firms need support to grow

Research by consultancy group, the Centre for Economics and Business Research (CEBR), revealed that bank lending to small companies had fallen by 4.5% over the past year, while borrowing costs had increased.

The study forecasted that 312,000 start-ups will be created by the end of 2010 and a further 297,000 in 2011, making a major contribution to replacing the 330,000 jobs estimated to be lost as a result of public spending cuts. Furthermore, these firms spend £1.1 trillion on their supply chain annually – 49% of UK business expenditure – and account for £1.6 trillion of total national business turnover, greater than the whole of the FTSE 100.

Read full article: http://www.growingbusiness.co.uk/small-firms-need-support-to-grow.html

Cuts To Hit Growth, Says BCC

The government’s austerity measures will have a more serious impact on growth in 2011 than expected, claims the British Chambers of Commerce (BCC) as it downgrades its economic forecast for next year.

The BCC has revised down its forecast for GDP growth next year from 2.2 per cent to 1.9 per cent but tips a recovery in 2012, raising expectations from 1.8 per cent to 2.1 per cent. The revisions came before the widely anticipated decision by the Bank of England’s Monetary Policy Committee today to maintain the interest rate at 0.5 per cent.

According to a BCC statement, the change ‘reflects the assessment that the negative impact of the government’s austerity plan will initially be more serious than previously envisaged’. Lower house prices and other signs of ‘financial fragility’ in the UK household sector have been blamed for the downgrade. The worsening eurozone debt crisis will also dampen UK growth prospects next year more than previously expected, the statement says.

Read more: http://www.growthbusiness.co.uk/news/business-news/1305443/cuts-to-hit-growth-says-bcc.thtml#comments-anchor

‘Economic recovery back on track’, says Osborne

The UK economy is “on track” for recovery despite “challenging” global conditions, according to the chancellor.
In his speech on Monday this week, George Osborne said the British economy is heading towards “sustainable growth”, as increased export trade was helping to reduce the danger of a double-dip recession.

However, the Federation of Small Businesses (FSB) has called on the government to implement policies that will help deliver a stronger economy through small business growth. The FSB wrote to the chancellor ahead of the Autumn Statement to highlight clear and comprehensive strategies which will allow the small business community to employ and invest.

Read full story: http://www.growingbusiness.co.uk/economic-recovery-back-on-track-says-osborne.html

Small manufacturers experience growth

Stronger demand and companies rebuilding stocks of goods helped boost production among the UK’s smaller manufacturers during the last quarter, according to the Confederation of British Industry’s (CBI) latest quarterly SME Trends Survey.

Just over 40% of small firms surveyed by the CBI said output rose in the three months to July compared to 20% that said it fell. The resulting balance of +21% is the fastest growth since April 1995 (+25%), and a marked improvement on the previous quarter.

‘Smaller manufacturers enjoyed a bumper quarter with production ramped up to meet growing demand and to rebuild stocks,” said Russel Griggs, chairman of the CBI’s SME Council.

“Exports are leading the charge, reflecting the pick-up in global trade and the relative weakness of sterling, but firms are still seeing their profit margins squeezed because of rising costs.”

Looking ahead to the next quarter, the report states that firms anticipate a slight fall in output, as the trends in domestic and export orders are expected to weaken.

Source: http://www.newbusiness.co.uk/