In Focus Commercial Credit
Small business growth outlook collapses
Research shows the extent of the difficulties for the UK’s smaller companies
Gavin Wraith-Carter Managing director, Hitachi Capital Business Finance
The proportion of UK small businesses predicting growth has plummeted from 39% to just 14% in the last three months – with 31% of business owners scaling back their businesses and 30% saying they will struggle to survive between now and the end of June. The findings form part of a quarterly
tracking study of small business outlook by Hitachi Capital Business Finance. Since the study began in 2015, the
proportion of small businesses predicting growth for the next three months has remained remarkably resilient, consistently standing at between 34%-39% over the last seven consecutive quarters. The bleak new data reveals the scale of
the impact that the COVID-19 pandemic has had on the sector. The industry sectors where small business
owners most feared collapse were hospitality and leisure (50%), retail (40%) and transport and distribution (37%). For the first time, every industry sector recorded more business
Percentage of small business owners predicting growth for the next three months – results over time
leaders predicting contraction or collapse than growth for the next three months. Regionally, small businesses in Wales
By sector, small businesses in hospitality (73%) and construction (47%) were most likely to have temporarily closed, retail was the sector where small businesses were most likely to have gone online (24%) – whilst IT (53%), media (51%) and legal (50%) were the sectors where home working has been most widely adopted
(73%) and Scotland (69%) were most likely to predict contraction or a struggle to survive. Conversely, small businesses in London were the most likely in the UK to predict some form of growth (19%).
Current status Reflecting on their current trading status since the outbreak of the COVID-19 in the UK, 32% of small businesses have temporarily closed, with just 1% so far closing permanently. Further, 34% have adjusted to a home
working regime, 12% have transitioned to become online businesses and 4% have diversified their services in order to stay afloat. Around one in seven (13%) reported no change to their trading status. By sector, small businesses in hospitality
(73%) and construction (47%) were most likely to have temporarily closed, retail was the sector where small businesses were most likely to have gone online (24%) – whilst IT (53%), media (51%) and legal (50%) were the sectors where home working has been most widely adopted.
Digital status The new data also revealed that the digital status of a business before the pandemic had a direct bearing on how it now saw growth prospects for the period to the end of June. Small businesses that were largely
online at the start of the year were most likely to predict growth for the
June 2019
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