Growth expectations by UK SMEs plummeted from 39% in April to just 14% in Q1 2020, according to a recent survey by Hitachi Capital (UK) plc.
Hitachi’s quarterly tracking study in April 2020 on UK SMEs also discovered that in April, 31% of business owners were scaling back and 30% said they would struggle to survive between now and the end of June.
The survey, carried out by YouGov, reveals the scale of the Covid-19 pandemic has had on the UK SME sector.
Hitachi, who commissioned the study, said the poll was conducted among a representative sample of 1,266 SME decision-makers in April 2020.
The industry sectors where SME owners most feared would collapse were:
hospitality and leisure (50%)
For the first time, every industry sector recorded more business leaders predicting contraction or collapse than growth for the next three months.
Reflecting on their current trading status since the outbreak, 32% of SME respondents have temporarily closed, but only 1% so far closing permanently. The research also showed the following:
34% have adjusted to a home working regime
12% have transitioned to become online businesses
4% have diversified their services in order to stay afloat.
Around one in seven (13%) reported no change to their trading status.
The new data also revealed that the digital status of a business respondent before the pandemic had a direct bearing on how it now saw growth prospects for the period to the end of June.
SMEs that were largely online at the start of the year were most likely to predict growth for the three-month period (28% compared to just 7% of offline businesses).
The current climate though has brought a sudden and seismic shift in confidence and outlook.
Many small businesses have been unable to trade and many are having to revise growth forecasts as the whole supply chain has been shaken by the current period of lock-down.