UK SME confidence levels are at their highest in 4 years

New figures show that small businesses in the UK are at their most confident in as long as four years.

Small and medium enterprises (SME) are more confident than they have been for four years, according to new figures.

The latest version of the annual Sage Business Index shows that SME confidence about their own prospects reached a score of 66.29 – 3.74 points above the score in 2013 and the highest for four years. Since that goes back to 2010 when the effects of the financial crisis were still being felt far more keenly than they are today, that’s a very encouraging statistic.

It appears that SME optimism is fuelled by growing faith in the recovery of the UK as a whole. Confidence in the national economy rose by a marked 7.81 points to 61.76.

Not only does that show that businesses are encouraged by the UK’s progress, but it puts them ahead of major European competitors. The score was 4.44 points higher than that of Germany and more than 26 points higher than France.

Yet in spite of countries that are clearly less hopeful about the future, the UK is more optimistic about the wider economy too.

The UK is similar to Germany and Poland in that it is more optimistic than pessimistic on the fortunes of Europe in the near future. That means they are far more confident that those in Austria, Switzerland and Portugal, where the score came in below 50. However, it has more to do to catch up to the newly resurgent Spain and Ireland, which are the most positive overall.

Small businesses in the UK are reporting impressive predictions for the coming months. Some 63 per cent said they believed their turnover would rise in the next year, with an average projected increase of 3.5 per cent.

What’s more, 47 per cent said they thought they would employ more staff over that period.

But in spite of all of this, UK businesses were among the most cautious of the 18 countries studied. Just 44 per cent of company decision-makers said they were “risk seekers” – a two per cent increase from the previous year, but still far behind the adventurous business leaders in the US and Brazil in particular.