The UK economy has been ravaged in the last 18 months. Between Q4 2019 and Q2 2020, GDP shrank by an eye watering 22%. Over £118 million was wiped off our national income. At the same time, government borrowing soared. In the first year of the pandemic the country borrowed £299 billion, the highest figure since records began in 1946. A further £200 billion is likely to be needed this year.
Meanwhile, The Centre for European Reform estimates Brexit has reduced UK trade in goods by £10 billion or 13.5% as of May 2021. These are body blows to our economy. Despite this, the country’s SMEs – which form the backbone of our business community and society – have come out fighting. Significant proportions have watched turnover, profit and investment grow. Their ability to weather the biggest storm in living memory is remarkable.
However, while there is much to be heartened about, dark storm clouds are brewing on the horizon. Many highlight significant challenges in the future. Accessing and exploiting new customers and markets is one of the biggest worries for the UK’s small businesses, cited by 53%. As is strengthening cashflow, cited by 54%. The skills gap – which is never far from the headlines – is a concern for 40% of firms.
Overcoming these challenges will be of paramount importance for the nation’s SMEs and the UK economy. Doing so as they continue to face such difficult headwind has never been harder.
We believe the insights of this report will be invaluable in helping businesses reflect on their own position so they can avoid costly and time-consuming mistakes as they battle to unlock their true potential.