NEWS
BLEAK OUTLOOK
FOR BUSINESS, ACCORDING TO EXPERT INDEX
THE HEALTH of SMEs in the UK remains at its lowest level in three years, according to the SME Health Check Index, a quarterly economic index compiled by leading economics consultancy – Centre for Economics and Business Research Limited (Cebr) in association with CYBG PLC, owner of Clydesdale and Yorkshire Banks. These are unprecedented times for many SMEs
and the latest index shows that things are getting even tougher, with the results presenting little improvement since the last quarterly index review. Overall the latest index is down to its lowest
level since early 2014 and this is driven by a number of key outlook indicators taking a knock in the last quarter – confidence has plummeted, input costs are up and revenue growth has slowed. Employment, revenue, confidence and net
business creation are all down compared to the last quarter, the latest SME Health Check has found. Businesses in the North and Midlands were found to be the worst hit – areas of the country that have been prioritised by the government and where there already exists a substantial gap in growth compared to London and the South East. The quarterly report combines various statistics
and indicators to evaluate the health of business and the environment that they are operating in. The Index takes on values between 0 and 100. A score of 100 would indicate maximum improvements across the Index’s eight indicators while a score of 0 would point to major declines in the indicators. Overall the Index fell from 56.3 in Q2 of 2017 to 46.9 in Q3. This is the lowest reading since the Index began in 2014. Six out of the eight indicators of the SME Health Check Index have worsened since the previous quarter. Commenting on the report, David Duffy, CEO
at CYBG said “The announcements made by the Chancellor in his Budget to help SMEs, especially on business rates, were very welcome. We also welcome the publication of the Industrial Strategy White Paper and the important measures this includes to build long-term prosperity, particularly outside of London and the South East. However, what is clear is that more needs to be done in the short term to help boost confidence amongst SMEs while we wait for the longer-term benefits of some of these policies to take effect.”
www.smeweb.com
BEST OF THE REST
Our pick of the business columnists
UPPAL’S CHALLENGE Now that Paul Uppal has been appointed small-business commissioner, the priority must be to ensure he works on the right issues. This should begin with a focus on late payments, where larger organisations are routinely
exploiting their purchasing power to take advantage of SMEs, often with devastating consequences. Some 30% of payments to SMEs arrived late in 2016, according to the Federation of Small Businesses, compared with 28% in 2011. To reverse this trend, Uppal should push the government to strengthen the Prompt Payment Code, perhaps by making it compulsory for all organisations over a certain size to sign up, and by introducing penalties for non- compliance. David Prosser, MoneyWeek
---------------------------------------------------------------------------------------------------------- ROOM TO EXPORT Despite President Trump’s America First philosophy, the UK’s bumbling (though still unclear) exit from the EU, or any number of other “glass half empty” stories that dominate the news, the reality for business generally is that life goes on and deals can and must be done. Undoubtedly, certain important industries fear any new barrier to the international trade …. nonetheless, there is a world of smaller, less affected enterprises across so many countries which already export, or want to find new export opportunities. These may sometimes be disrupters to existing global
businesses, such as innovative technology which is changing so much of the business environment, regardless of political noise. Michael Sippitt, City AM
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A £110m INSULT Efforts to curb pay in Britain’s boardrooms and outsize rewards in the City are still failing. In spite of the resignations of the senior independent directors at housebuilder Persimmon there is no public sign so far of chief executive Jeff Fairburn giving up any of his total pay, bonuses and incentive package of £110million. The scale of his award is an insult to a generation of young people in Britain who now need an £80,000 deposit to get on the housing ladder. Alex Brummer, Daily Mail
------------------------------------------------------------------------------------------------------- BLEAK HOUSE If Christmas showed us anything, it is that the high street is dying in most of our towns and many of our cities. Figures emerging from the main high-street shops covering the Christmas trading period show that a combination of falling disposable incomes and internet shopping seriously dented sales … An attractive town or city needs to invite people with safe streets (those that demote cars and accommodate cycle lanes) and offer space for the things people want – cultural events, markets or new parks. This is only possible when the value of land declines, making it available for a wider range of activities. It shouldn’t need cities to be destroyed, like Detroit, for them to reinvent themselves. Yet that might be how it happens.
Phillip Inman, The Observer SME 13
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