Confidence among small and medium-sized firms is back on the rise after the double-whammy of Covid and Brexit, according to a recent survey.

The research polled 760 firms and revealed that despite recent challenges, 60% predicted profits are set to rise over the next 12 months.

Conducted by accountants and business advisors Azets, which has offices in Maidstone, Ashford and Canterbury, the details emerged within its inaugural SME Barometer findings.

The research, which was undertaken in April and May 2021, revealed that despite the economy, Covid-19 and competition ranking in the top three threats for UK SMEs overall, 71% in London and the South East feel positive about the UK’s economic outlook over the next 12 months.

There are further positive signs for SME growth and jobs across the UK as a whole with over half (56%) expecting to recruit more staff over the next year and 60% intending to invest over the next year.

Reassuringly, 89% of the SMEs quizzed in the region said they expect to be trading in a year’s time. However, 4% said they feared the worse, while 6% were unsure.

During the Covid crisis, 25% of SMEs had staff on furlough, the barometer found, while 71% felt well supported by the government during the pandemic.

Those who get this transition right will be in a much better position to survive and thrive

William Payne, Azets' regional CEO for London and the South East, said: "SMEs are feeling much more optimistic about the prospect of an economic recovery and the service sector in particular is showing stronger and faster signs of recovery. However, much uncertainty remains. In summary, our research highlighted a stubborn optimism among SMEs about the prospects of recovery, coupled with a pragmatic awareness of the need to adapt to the ‘new normal’ post-Covid world.

“The biggest opportunity as well as the greatest threat for SMEs will be to adapt their post-Covid business model to this new world, using technology and flexible working. Those who get this transition right will be in a much better position to survive and thrive. It is vital that the SME sector continues to adapt and prosper as the economy recovers, and these findings point to areas where further government policies are vital in delivering the support businesses need post-Covid as well as post-Brexit.”

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