Overall, SME confidence falls over six months
The number of small business owners with a positive outlook has fallen over the last six months – and in some industry sectors by as much as 20% - according to new research from Aon Risk Solutions.
The preliminary findings from Aon’s Small Business Change Index tracks business leader outlook and attitudes to risk every six months. The last cycle of research in March 2015 - ahead of the Scottish referendum and the pending General Election – was a period of uncertainty for many SMEs. Six months on, rather than seeing signs of more broad-based economic confidence, the proportion of SMEs with a positive business outlook for the next six months has fallen from 50% to 48%. The proportion anticipating difficult times ahead has risen from 9% to 11% and those anticipating no change stays at 39% for the period.
Looking within specific industry sectors, swings in confidence were significantly more marked. IT was the only sector surveyed where there was a net increase in the number of businesses with a positive outlook for the next six months. Sharp falls were reported in media, finance, accounting and construction. Retail replaced media as the sector where most SME decision makers were confident – although even here confidence was down from 55% to 49%.
Chris Lee-Smith, Managing Director, Aon Risk Solutions Affinity Commented: “When we commissioned this research last spring ahead of the General Election, almost one in four UK businesses identified political uncertainty as a very real risk to overcome in the next 12 months. Six months on, it is a surprise to see that SME business leader confidence is at best static, with some significant swings of opinion prevalent in a number of key industry sectors. Businesses that embrace change and are looking to open new markets are most likely to be very confident, whereas confidence is notably more muted among those businesses that are placing most emphasis on maintaining their current position. An over-arching concern, whether bullish or muted in outlook, the vast majority of business leaders are placing scant emphasis on practical risks close to home. For example, less than one in 30 business leaders placed importance on the digital security of their business, relative to other factors – something we will explore further with our next stage of research.”
Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services.