The number of small and medium-sized businesses in the UK expecting growth has dropped to its lowest point in nearly 10 years according to a new report.
The research called the UK SME Manufacturing Barometer, conducted by SWMAS found that 13% fewer firms asked expected to see their revenues increase over the next six months.
Two in 10 manufacturers reported they expect a drop in sales between now and March next year, whilst 28% have already seen a sales decline in H1 2018.
The drop in SME confidence and an evident decline in current sales levels for some is starting to have a knock-on effect on investment, with under 40% set to increase in their firms’ and a 12% fall in the number of small-medium manufacturing firms looking to recruit more staff in the immediate future.
Managing Director of SWMAS, Simon Howes said of the research findings that: “What we are clearly witnessing is manufacturers putting the brakes on new investments and recruitment whilst some enter survival mode caused by ongoing Brexit uncertainties.
Read more: Have UK manufacturers already lost out because of Brexit?
“However, we are also seeing signs that suggests our SME manufacturers are looking at their own ways to change and adapt to meet the Brexit challenge, such as intentions to start exporting or to export more, development of new products and improvements in efficiency and productivity.”
The good news and potential opportunities
Whilst this latest UK SME Manufacturing Barometer paints a rather bleak picture, there are still causes for optimism.
For example, 51% of the businesses questioned do still expect to see revenues grow over the next half-year.
And away from this latest research, the last 18 months has been extremely strong for UK exporters as a whole.
UK exports reach record levels last year, topping £616bn with marked growth in both good and service exports. Interestingly, 55% of total export value was derived from outside the EU market.
Internatl Trade Secretary, Liam Fox noted that: “British goods remain in global demand as exports to non-EU countries continue to grow.
“It shows the confidence the world has in our goods and is important as 90% of growth in global trade will come from outside the EU.
A further annual report conducted by the OFX found that, whilst confidence may be slipping according to the above data, some 62% of 500 business owners it quizzed said they were confident of achieving sales and doing business outside of the UK with a further 46% of SMEs specifically saying that Brexit was yet to affect their desire to grow through exports over the coming years.
Read more: Meet the sectors not overly concerned about Brexit
And the opportunities for businesses yet to begin exporting are more than apparent. Last year, the average international revenues for UK businesses topped £50,000 with a 47% increase in overseas sales in 2017 compared to the year previous too.
Mike Wilson, CEO of Go Exporting comments that: “Much as I mourn the decision to exit the EU, Brexit need not be negative, act now and plan properly and it could open a world of opportunities.”
Go Exporting has helped companies open new markets around the world, from Germany to Canada and Saudi Arabia. Find out how we could help your business grow on the international stage through our export consultancy.