Improving economic conditions in Scotland drive multi-billion SME investment - Clydesdale

The new survey reveals SMEs intend to invest, on average, seven per cent of their annual turnover back into their business and the UK economy in the next 12 months. This has increased since October last year when the UK average investment figure was six per cent of turnover.

Two fifths (41 per cent) of Scottish SMEs believe the UK economy is in better condition today than it was before the recession in 2008-2009.

Nationally SMEs intend to invest, on average, nine per cent of their annual turnover, which could drive investment totalling £108 billion in the next 12 months. According to the latest UK Government statistics, there are 5.2 million SMEs in the UK with a combined annual turnover of £1.2 trillion.

The leading focus for SMEs is to invest in new equipment, with around a quarter (27 per cent) saying it is the top priority. This is followed by investment in developing products (12 per cent) and training staff (10 per cent).

Findings across the UK are broadly similar, with the North East, East of England, and the South East most confident with investment levels expected to be slightly above the UK average at 11 per cent. Industry-wise, food and drink businesses challenge the UK trends with an average investment of 13 per cent of annual turnover.

The main reasons cited by Scottish SMEs for investing at the moment are the opportunities created in the domestic marketplace (28 per cent) and the improved economic conditions (22 per cent). Almost one in ten (eight per cent) feel conditions for exporting have improved.

Alastair Christmas, regional director, business and private banking at Clydesdale Bank, said: “We know from official figures that the UK economy is healthier in terms of production, job creation and export levels. Our nation of small and medium sized businesses is a good barometer to understand how well the economy is performing and our research shows SMEs are sufficiently confident in the economy to be increasing the level of investment in their businesses.

“When businesses are looking to invest it’s important that they have access to appropriate expertise and a wide range of financing options. Our relationship managers seek to develop a genuine understanding of each business they work with and as a result can be much more creative in how they support business owners.

“Our lending initiatives, that have been specifically designed to support SMEs, include providing capital free periods and 100% funding for premises and, together with our size, provide us with the agility and flexibility to continue bringing a genuine challenge in the SME market.”