A recent survey by NatWest has revealed that SMEs in the UK have enjoyed a strong start to the year, signaling resilience and adaptability in the face of economic challenges.
The survey, based on responses from 850 companies across Britain, highlighted a positive trajectory in new business and output growth, particularly within the service sector. Notably, March marked the fifth consecutive month of new business expansion, with many respondents attributing the increase to the commencement of new projects.
Sophie Milliken, founder of Moja, a marketing agency based in Newcastle, echoed the optimism reflected in the survey results. Milliken cited a string of record months in the previous quarter and expressed confidence in the company’s trajectory. Emphasizing the significance of relationships and service quality in driving business success, Milliken underscored the importance of strategic planning and prudent decision-making, particularly in terms of recruitment.
However, despite the overall positive sentiment, cautious hiring practices were evident among SMEs, according to the NatWest study. While some services companies added to their workforces in March, the growth was described as “soft” and “marginal,” reflecting lingering uncertainties, including the upcoming election. Hannah Rowe, founder of Rowe IT, based in Plymouth, acknowledged being more cautious about hiring, citing uncertainty related to potential shifts in government priorities post-election.
Rowe IT, which primarily serves the public sector, faces challenges associated with governmental uncertainty and changing priorities. The reluctance to invest in long-term projects amid election-related uncertainties has contributed to a cautious approach to recruitment and business planning.
In addition to hiring concerns, the NatWest survey also highlighted SMEs’ attitudes toward sustainability. While sustainability initiatives are gaining traction globally, only 36 percent of the surveyed companies viewed sustainability as a high priority for the next year. This modest increase from the previous year underscores the ongoing challenges faced by SMEs in integrating sustainability into their business strategies.
Rowe emphasized the importance of prioritizing sustainability efforts, noting its relevance to recruitment and retention, particularly among younger generations. Despite the perceived challenges, Rowe stressed the need for SMEs to adopt a proactive approach to sustainability, citing its potential impact on business growth and talent acquisition.
Overall, while SMEs have demonstrated resilience and growth in the early months of 2024, challenges such as hiring caution and sustainability concerns continue to shape their strategic priorities. As economic uncertainties persist, SMEs must navigate evolving market dynamics while balancing growth aspirations with prudent decision-making.
Read more:
SMEs See Strong Start to 2024 Despite Hiring Caution and Sustainability Concern