British SMEs investing in e-commerce are more confident

British small and medium sized enterprises (SMEs) that invest in e-commerce and export are more confident about their business prospects than the businesses that do not, said a recent report. A majority of SMEs expect a growth in revenue and jobs over the course of the next 12 months and they said that the Brexit vote has not impacted business decisions.

SME Growth Tracker, a new report commissioned by Enterprise Nation and Amazon UK, was released by Capital Economics, an independent economic research company. The report examined SME sentiment on economic growth, exports and the digital economy. It is based on a YouGov survey of over 1,000 British SMEs.

“Companies who export and use e-commerce say they are expecting faster revenue growth than those who don’t sell online or only sell domestically,” said Mark Pragnell, chief project economist, Capital Economics.

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About 45 per cent of British SMEs use e-commerce and they expect e-commerce revenues to grow from 46 per cent in the last one year to 48 per cent in the next 12 months. SMEs that use e-commerce expect revenue growth of 1.8 per cent over the coming year compared to 1.3 per cent for those who do not. Those who use e-commerce also expect job growth of 0.9 per cent compared to 0.6 per cent for those who do not. About 20 per cent of SMEs are likely to have their own mobile apps in the coming year.

The report noted that 46 per cent SMEs that export are anticipating export revenues to grow by 0.8 per cent in the next one year. SMEs who export predict revenue growth of 1.8 per cent compared to 1.2 per cent for the 54 per cent that do not. Exporters also expect job creation of 1.1 per cent, compared to 0.5 per cent for those who do not export.

About 77 per cent of SMEs say Brexit has had no impact on business decisions, while 23 per cent report they have put off business decisions due to Brexit. Close to 12 per cent SMEs have delayed hiring, 7 per cent have delayed additional investment in marketing, and 7 per cent have put off improving business tools.

Looking ahead to post-Brexit Britain, SMEs believe that government should prioritise negotiating new trade deals with the EU over any other region or country. The rest of Europe, North America, China, India and Asia are also among highest priority areas for future trade negotiations.

SMEs expect revenue growth of 1.5 per cent, jobs growth of 0.7 per cent and capital expenditure growth of 0.9 per cent, while supply costs are expected to jump by 1.8 per cent and prices to increase by 1.2 per cent over the coming twelve months.

The report also added that SMEs that use e-commerce have a Confidence Index Score (designed to give a snapshot of the economic sentiment of British SMEs) of 7 compared to 3 for those that do not use digital tools. SMEs that export have a Confidence Index Score of 6 compared to SMEs that only sell domestically who have a score of 4.