Although this is good news for the sector, more than a quarter of SMEs said they are not planning on investing due to ‘domestic economic uncertainty’ with the upcoming Brexit.
In order for small businesses confidence levels to keep rising, SME owners and decision makers need the clarity and direction in order to future proof their businesses.
Director General of the British Chambers of Commerce, Adam Marshall stated that “labour and skills shortages are set to be the biggest potential drag on business in 2018.” The results of the tracker reflect this.
As SMEs plan to change their investment to prepare themselves for Brexit, mitigate potential recruitment difficulties and to protect against new threats which may come their way, here is an overview of how SMEs plan to invest in 2018:
The top three areas of investment for 2018:
Over a third (37%) plan to invest in upskilling existing staff between January and April 2018
28% intend to recruit new staff in the first quarter of the year
28% plan to invest in digital technology/IT
The top three priority areas for SMEs are:
To remain competitive, cited by 16% of SMEs
To reduce operating costs or increase efficiencies, cited by 15% SMEs
To fund expansion within the UK, cited by 15% SMEs
Despite the increase in plans to invest, there remain some barriers which are holding back some SMEs from moving forward with investment.
The most significant barrier is the uncertain economic environment in the UK (26%), which has been the most cited obstacle to investment each quarter since Q1 2014. This is closely followed by those that say they are looking to build up cash reserves (25%) and those specifically citing uncertainty arising from the UK’s exit from the EU (21%).
Find the full results of the tracker here.