Midlands SMEs are set for a boost with increased turnover and improved cashflow, new Paragon Bank research has found.
The research found that 62% of Midlands SMEs expected their Q1 2023 turnover to be higher than twelve months ago.
Carried out by Opinium, the research also found that cashflow is also set to improve for Midlands SMEs during 2023, with 56% predicting increases between Q1 and Q2 and only 15% predicting expecting cashflow to tighten.
Anticipated improvements to cashflow and turnover has led to optimism for the year ahead, with 54% of Midlands SMEs confident about the future – above the national average of 50%.
Confidence in their own business is greater than that for the UK economy as a whole. Of those surveyed, only 34% of Midlands SMEs expressed confidence on how the economy will perform – but this increased to 62% when considering the sector in which they operate.
The optimism of Midlands SMEs in their businesses is matched by planned investment in their operations, including:
- Existing premises (90%)
- Commercial vehicles investment (89%)
- R&D (88%)
- Staff development (71%)
- IT/technology investment (70%)
- Staff recruitment (68%)
- Fleet or director vehicles (67%)
- Machinery/equipment investment (45%)
While the research findings identify both the optimism and resilience of SMEs it also identified the challenges presented by the high inflationary environment of 2022 with increases to:
- Equipment (85%)
- Fuel for vehicles (84%)
- Raw materials (83%)
- Employee salaries (81%)
- Production costs (73%)
- Vehicle maintenance (71%)
- Employee benefits (63%)
- Premises cost (60%)
Peter Pike, Paragon Bank SME Lending Regional Director, said: “With plans for investment and optimism for the year ahead, Midlands SME are once again rising to the challenge of supporting the regional and national economy. Expected improvements to both cashflow and turnover create the conditions for increased business – and it is vital that businesses have access to financing to support their growth ambitions.
“SMEs looking to invest should also take assurance from the availability of financing from specialist lenders, such as Paragon – and we are ready to work with them to find solutions that will support their growth ambitions in the years ahead.”
John Phillipou, Paragon’s Managing Director of SME Lending, said: “With expectations for growth and plans to invest in their businesses, SMEs are ready to help the economy recover from the challenges of recent years. It is clear from the research data that SMEs are optimistic and resilient, and it is therefore vital that they can continue to access the financing required to support their growth plans.”
