Most of Britain’s small and medium-sized enterprises (SMEs) are waiting for 2025 with confidence, regardless of lingering financial uncertainties, current budgetary pressures, and world geopolitical considerations.
New survey knowledge from KPMG and Aviva present an optimistic image rising among the many nation’s enterprise house owners, who anticipate elevated demand, worldwide growth, and a give attention to new services and products to help their development aspirations.
KPMG’s ballot of 1,500 privately owned firms from sectors together with expertise, finance, manufacturing, and retail revealed that 92 per cent of respondents are upbeat in regards to the 12 months forward. This sentiment was echoed by a separate Aviva survey of about 500 smaller companies, through which 89 per cent had been assured going into 2025.
KPMG famous that a lot of the optimism centres on expectations of rising demand at house and overseas. Many firms additionally plan to launch new choices and transfer into contemporary markets, significantly in Europe and North America. Longer-term, the outlook is equally encouraging, with 85 per cent of Aviva’s respondents anticipating doing extra enterprise in 5 years than they do immediately.
“2024 has been turbulent, so it’s encouraging to see private businesses showing resilience and casting a positive outlook for 2025 and beyond,” mentioned Euan West, head of KPMG’s non-public enterprise follow within the UK and Europe. Nevertheless, he cautioned that subsequent 12 months would nonetheless carry its challenges.
A key concern is value pressures: simply over a 3rd of firms in KPMG’s survey imagine that the will increase to nationwide insurance coverage contributions and the nationwide minimal wage introduced by Chancellor Rachel Reeves within the October funds will squeeze their revenue margins. But reasonably than scaling again, most SMEs plan to speculate extra in expertise—particularly synthetic intelligence—to boost operational effectivity and counter rising prices.
The surveys point out that these companies won’t solely give attention to tech-enabled productiveness features; they’re additionally dedicated to bolstering their workforces. Whereas some critics feared hiring would possibly sluggish in response to greater employment prices, many SMEs plan to spend money on abilities and workers growth. But the expertise pool stays a fear: solely a 3rd of small companies strongly agreed there are sufficient expert employees out there domestically. Particular sectors, together with manufacturing, hospitality and leisure, and monetary providers, stay significantly anxious about shortages of expert workers.
Infrastructure enhancements are additionally excessive on the want listing. Two thirds of SMEs say they want higher native transport choices, from electrical car charging factors to extra cycle lanes, to ease worker commutes and help sustainable development.
David Schofield, sustainability director at Aviva, mentioned: “SMEs are the backbone of the UK economy. Their growth is vital not only for economic stability but also for the prosperity of local communities. These survey findings underscore their determination and optimism while also highlighting the challenges that could impact their growth.”
Regardless of the headwinds, British SMEs usually are not standing nonetheless. Their plans for internationalisation, new merchandise, and investments in individuals and expertise recommend that 2025 could possibly be a brighter 12 months, setting a constructive trajectory for the UK’s broader financial fortunes.
