The Courier & Advertiser (Angus and Dundee)
‘Wake-up call’ as Brexit is set to hit SME businesses
Hiring among SME businesses looks set to tumble by 2022 as Brexit uncertainty takes its toll, costing the economy more than £6 billion a year.
A new report by Clydesdale bank owner CYBG and the Centre for Economics and Business Research (Cebr), signals the average number of workers taken on each year will plunge.
It estimates the sharp pull back in SME hiring could cost the UK economy dear, with the annual contribution to the UK’S gross value added figure falling to just £4.8bn.
This compares with around £10.9bn added each year to the UK economy between 2010 and 2017.
Gavin Opperman, group customer banking director at CYBG, said the figures were a “wake-up call”.
“SME contribution cannot be underestimated,” he said.
“We must understand the pressures facing them and provide the right environment and support to help them flourish and continue being a major employer of the UK’S workforce.
“In particular, we must give our small firms the access to talent they need postbrexit and address how these firms can be incentivised to invest in skills.”
SMES employ around 16.1 million people, roughly 60% of the UK’S total private-sector workforce.
A further survey of SMES by CYBG on hiring plans for the rest of this year found 9% of firms expect to cut their workforce during the next six months, while just more than half expect to expand headcounts over the next six months.
A worsening outlook for the UK economy was a large factor in the reluctance to hire, as well as rising staff costs and a reduced availability of skilled workers.
But the latest SME health check index also offered some cheer, with signs the sector’s overall health is improving, with a reading for the first quarter of 2018 increasing by 3.4 points to 47.4 and ending five consecutive quarters of decline.