UK SME Confidence Rebound As Pessimism Recede
Signs of life in the economy and an increase of business activity has led to an surge in confidence of CEOs within UK and Ireland SMEs. The Vistage CEO Confidence Index rebounded to 82.9 Q3 2020; while not at peak recovery, this is just 2.5% below Q3 2019.
While all factors that comprise the index improved from last quarter, the biggest driver of the rebound is decreasing pessimism about the future UK & IRL economy. September’s survey found that 42% of CEOs expect the economy to worsen in the year ahead, a 10 point improvement from 52% last quarter.
The other factors that contributed to the rebound from last quarter include improvements in:
- Revenue expectations with 54% expecting them to increase in the next 12 months
- Profitability expectations with 48% expecting improvement and 28% remaining the same
- Number of employees, where 41% expect an increase and 39% remain the same
SME Cash flow remains strong for the next 12 months
There is significant optimism amongst SME leaders within Vistage. This is backed by the fact that 75% of businesses have enough cash flow to sustain them for the next 6 months, up from 69% in the previous quarter.
In addition, 72% of SME business leaders are optimistic that they will have recovered from the economic impact of the COVID 19 pandemic within 6-12 months.
Four in five business leaders are also positive that they can continue to maintain staffing levels, or increase them.
However, there are a couple of caveats to the optimism. The concern over a second wave of COVID where 51% said they would see a loss of revenue, 13% would result in job losses and 6% would see complete closure.
Brexit also figured in their concerns with 55% saying the uncertainty was impacting their business.
Vistage, Managing Director (UK), Geoff Lawrence said: “In spite of the evident challenges faced by businesses in the UK and Ireland in the wake of the COVID-19 pandemic, it’s encouraging to see the positive outlook held by business leaders. We have seen many businesses within the Vistage community rising to this challenge in innovative ways in the last six months.
"As the looming Brexit deadline further adds to this uncertainty, ongoing resiliency, preparation and peer support are critical ways for business leaders to thrive in these challenging times.”