The survey found that nearly two-thirds of respondents lacked optimism over the growth of their business within the next six months and only just over one-third are forecasting a greater profit this year compared with last year.
Moreover, 40 per cent of respondents suggested they would not be taking any sort of holiday this summer and a majority are expecting to earn the same or less this year, in comparison with last year.
Commenting on the findings, Managing Director, Direct & Partnerships, AXA Commercial Insurance Darrell Sansom, who commissioned the survey, said: “Entrepreneurs and small business leaders are the backbone of any economic system. Their relentless spirit and passion provides much of the energy fueling the UK economy, so it’s alarming that such a large proportion are so downbeat over their short-term business prospects. Much like the world’s athletes gathering in the country this summer, the UK business community is readying itself for a very competitive trading time. They’ll be working even harder and with less resources to chase the growth opportunities that are out there.”
Continued economic uncertainty across the Eurozone and Government austerity measures were cited as the two biggest drivers behind respondent’s lack of optimism, with most suggesting low interest rates, the London Olympics and other milestone events having no effect on their economic outlooks.
Respondents also demonstrated a cautious approach to managing recruitment, with only nine percent suggesting they were planning on hiring new staff by the end of the year. Of those with no hiring plans (91 per cent), most believed they won’t require the extra resource (55 per cent).
Asked about their capital investment plans, three-quarters of respondents suggested they are not planning on investing in any new equipment or resources this year. Of those planning an investment, a large number suggested they were purchasing something they didn’t have in the business already or to fulfill existing demand.
Sansom continued: “A lot has been done to keep the UK SME community afloat over the past few years, but this survey is suggesting that business leaders are lacking the support they need to expand their businesses. Our Business Guardian Angel website, for instance, was launched to arm small businesses with the practical tools and knowledge needed to enable growth during these fragile trading conditions, whilst managing risks affecting their business throughout the process.”