Confidence in economy sees capex intentions rise to £59bn

The regular survey found also that UK SMEs feel more buoyant about their future prospects, and less concerned about the overall health of the economy. 

The findings, based on first quarter (Q1) research amongst over 2,250 SME business leaders across seven European markets (Czech Republic, France, Germany, Hungary, Italy, Poland and Britain) show that UK SMEs intend to increase capex investment by 12 per cent in the next 12 months to a total estimated £58.6bn. In addition, they plan to create more than 660,000 jobs in the next twelve months, 26 per cent more than planned in Q1 2013.

Overall confidence is stronger amongst SMEs in the UK than in any other European market, with almost two thirds of SMEs feeling positive about the future (63 per cent against nine per cent negative) compared to just over half in 2013 (52 per cent and 19 per cent respectively). 

The report notes also that less than a quarter of businesses surveyed in the UK reported economic uncertainty as an obstacle to investment, which significantly less than at the same time last year (23 per cent against 40 per cent).

In a statement, Ilaria del Beato, chief executive of GE Capital UK, said: ‘UK SMEs appear to have reached a crucial tipping point in their willingness to invest for growth and hire new staff.  This is a true measure of economic recovery and points to promising future growth potential as greater investment should help boost productivity.’

Enhanced productivity remains the top reason for upgrading equipment (54 per cent) and the report records a renewed faith in the domestic economy, which appears to be spurring some UK businesses into action, with seven per cent more SMEs planning to invest primarily for expansion at home than at the same point last year (16 per cent vs. nine per cent).  Roughly one in ten companies are looking to fund planned expansion into new export markets, up from three per cent in Q1 2013. 

‘Last year, planned increases in investment were somewhat tempered by a ‘wait and see’ attitude, with many businesses ultimately putting off investment until absolutely necessary,’ del Beato said. ‘The big difference this year is the greater emphasis on taking advantage of opportunities to expand, rather than just the necessity of replacing deteriorating equipment.’