SME Confidence Crisis

The Aviva Pulse identifies that confidence among SMEs in 2011 is lower than ever. When questioned, only 13% of SMEs thought the UK economy would see any sign of improvement in 2011, leaving the vast majority predicting difficult days ahead. This represents a 5% drop since autumn 2010, when 18% believed the economy would start to improve in early 2011.

Over one third (37%) have found trading conditions tougher than they expected so far this year, a trend that has continued from autumn 2010, when 39% experienced similar trading conditions². This figure increases to 43% among owners of shops and salons, the highest of any other business type.

More than one quarter (28%) of SMEs questioned still believe there is a real danger of a double-dip recession - and this has not changed since last autumn.

On a more positive note, over a third (35%) of restaurants have actually found conditions easier than expected in 2011, the highest of any business type. This is markedly up from 2010, when just 21% expressed such optimism in this sector.

It is evident from the research that the summer months will provide a vitally important trading period for SME's, with 28% predicting a difficult summer. Furthermore, 6% claim this period alone will determine whether they can continue to do business into the rest of the year.