Nearly three-quarters (73 per cent) of German small businesses say their national economy is performing well, according to Bibby Financial Services.
The global study, which surveyed business owners in the US, Germany, UK, Poland, Hong Kong and Ireland, finds that more than two thirds (67 per cent) of Irish small and medium-sized enterprises (SMEs) are confident about the local economy.
German small businesses, and Irish SMEs too, are also most confident about the future with 57 per cent of SMEs in both markets expecting sales to grow in the year ahead.
Conversely, less than one in five businesses in Hong Kong (15 per cent=) say they are confident about their local economy, with less than a quarter (24 per cent) expecting sales to increase in the next 12 months.
Steve Box, International CEO of Bibby Financial Services says that Germany is often seen as the industrial beating heart of Europe. ‘Our research underlines the confidence of the small businesses in Europe’s largest economy as the EU looks to agree its shape post-Brexit.
‘It is a different picture for the economy in Hong Kong where the majority of business owners are pessimistic about future sales and the local and global economies.’
The study reveals the sentiment of global SMEs in areas such as investment, confidence, challenges and opportunities, overseas trade and payment terms.
In relation to international trade, findings show that small businesses in Hong Kong are three times as likely (69 per cent) to export as those in the UK (22 per cent) and seven times as likely as in the US (10 per cent).
Box adds, ‘Due to its geographical location, Hong Kong is an important gateway to trading activities between China, the US and Europe. Its economy is highly export driven and this may explain why confidence is subdued during a time of economic change and significant currency fluctuation.’
Businesses hit by foreign exchange fluctuations
Across the study, almost a quarter of businesses (24 per cent) say that foreign exchange fluctuations are the biggest challenges they face in relation to international trade. For SMEs in Poland and Hong Kong, figures rise to 46 per cent and 37 per cent respectively.
Despite pockets of confidence in their local economies, the research reveals that nearly three quarters (73 per cent) of all SMEs have concerns about the global economy, with those in the US (83 per cent) and Ireland (82 per cent) the most concerned.
Box says, ‘It’s clear that confidence in the global economy has suffered due to macro-economic and geo-political events in the last six months. The real question is for how long will confidence be affected?’
He adds that it is likely that the UK’s formal exit from the EU – commencing with the triggering of Article 50 by the end of March next year – will have further economic consequences that will be felt around the world.
‘As the world shapes itself with a new US president and an EU without the UK, it is those small businesses that can adapt to changing domestic and international trading conditions that will be best placed to profit and grow in 2017.’