SMEs still hopeful for own sector despite gloom over economy
PUBLICLY QUOTED growth companies are gloomier on prospects for the UK economy than at any time in the past five years – but are considerably more upbeat about their sector.
Research carried out for the Quoted Companies Alliance, the independent membership organisation that champions the interests of small to mid-size quoted companies, found market-listed SMEs had an optimism rating of 45.8 last month – in negative territory for the first time since April 2013, in contrast to the 57.5 experienced last May.
A measure of 50 is neutral and 100 is very optimistic.
Tim Ward, chief executive of the Quoted Companies Alliance, said: “We are seeing continued but cautious short-term optimism of small and mid-size quoted companies towards their own business prospects.
“Intentions over raising capital have fallen significantly, perhaps indicating that their pessimism about the UK economy is having a real effect on their long-term planning.”
Oliver Rowe, director of YouGov, added: “These findings echo many of our other surveys. This sector is a very important part of the economy and we are seeing that small and mid-size quoted companies are looking forward relatively favourably to the next 12 months but seem to be more cautious thereafter.
“It is good to see that hiring intentions have held up reasonably well.”
The findings are in the latest QCA/YouGov Sentiment Index, which has tracked the mood of businesses since 2011. Companies were most optimistic in January 2014, scoring 69.3 and remaining largely confident about the UK economy until May 2017.
Despite this dip in optimism over the economy as a whole, small to mid-sized quoted companies – most of them traded on the main London Stock Exchange, AIM or NEX Exchange – were considerably more bullish on their own prospects, with a 67.7 optimism rating, slightly down on 69.6 in May.
On job prospects, 70 per cent of companies polled by YouGov expected the number of full-time employees in their businesses to increase over the next 12 months, against 74 per cent in May, while 20 per cent predicted a decrease.
When asked about intentions on raising capital over the next 12 months, only 28 per cent of companies were considering doing so compared to 39 per cent in May, the lowest level since the QCA began tracking intentions in 2014.