A study by Allied Irish Bank (GB) finds that more than six in ten (62 per cent) owner-managed businesses expect the economic situation to improve in the next year, and nine in ten (90 per cent) are optimistic about future business prospects.
Businesses definitively state they are better off than they were this time last year and fewer see themselves as worse off. One in three, or 33 per cent, of business owners say they are currently in a growth phase – up three percentage points from last year and 60 per cent of businesses say that the best days for their businesses lie ahead.
The definitive general election result has created more certainty and concerns about deflation have abated; a higher proportion of respondents now see inflation as a risk (31 per cent vs. 22 per cent in 2014), while fewer now see government regulation as a threat, falling from 48 per cent to 39 per cent of businesses surveyed.
But all owner-managed businesses continue to be aware of macro-economic headwinds with 20 per cent rating Eurozone instability as the biggest issue facing the UK economy and one in ten saying the upcoming referendum on UK membership in the EU is the biggest risk.
Gerard O’Keeffe, head of Allied Irish Bank (GB) says that owner-managers are much more confident about the future of their businesses and more optimistic about the broader economic outlook, but there is still cause for caution.
‘Ongoing market instability in Asia will combine with concerns about the future of the Eurozone, meaning that owner-managers need to carefully balance the risks and rewards before making a decision about whether to invest for growth.
‘But our research shows that owner-managers are often hesitant, delaying investment until they are really sure the economy is growing strongly. This can be a drag on growth at a time when we need every part of the economy to be firing on all cylinders.’
Jacqueline O’Donovan, managing director of O’Donovan Waste Disposal Limited, a business based in North London says, ‘We are seeing an improving economy in our finances, as well as sensing it in the conversations that we’re having with customers, colleagues and other local businesses.
‘The definitive general election result has given us much more certainty, although we are still vigilant about the risks. We’ve been closely monitoring developments in the Eurozone, and what’s going on in Asia is also cause for concern. All in all as things stand we remain positive.’
Almost half of business owners expecting an uptick in cash reserves and there is a marked increase in those prioritising a capital raise with almost 45 per cent seeing it as likely next year, up from 33 per cent the year before.
More businesses in the North of England and Scotland are expecting to increase headcount over the next 12 months but only 16 per cent of business owners in Scotland feel that the government is doing enough to support them; this compares to a national average of 42 per cent.
Further reading on business growth
