Insights 06.4.22

87% of owner managed businesses fear that inflationary pressures will impede their growth in 2022

Insights 06.04.2022

Inflationary pressures pose a huge risk to the SME sector with 87% of owner managed businesses reporting these will impede their growth in 2022. This is one of the key findings of a survey of 335 SMEs launched by the Association of Practicing Accountants (APA) today.

The Association of Practising Accountants (APA), of which CBW is a member, is a network of 19 leading business advisory firms meeting the needs of the real economy from SMEs through to AIM companies, as well as the third sector. APA members collectively advise and support well over 14,000 businesses with turnover up to the hundreds of millions. APA clients produce goods and services which help drive jobs and growth across the UK and internationally.

As well as making regular submissions to Government and Parliamentary inquiries, the APA also regularly surveys owner managed businesses to be able to present their views to policy makers.

Here are some of the findings from the latest survey for SMEs announced on 6 April 2022:

  • 64% of SMEs report that rising energy costs are impeding their ability to deliver
  • 43% report that Brexit has either had a negative or very negative impact on their business against 4% who reported a positive impact
  • 59% report that staff recruitment and retention is now presenting more of a challenge than 12 months ago with only 3% reporting this is now less of a challenge
  • 62% are focused on surviving or sustaining their business against 33% who are looking to grow over the next six months

Despite these challenging economic headwinds there is also evidence that those businesses that have survived the pandemic are now more resilient and more confident.

  • 81% of owner managed business report that they are in better shape for the future than before the pandemic
  • 82% of respondents were either very or somewhat confident that they would be able to access the finance they needed over the next six months
  • 79% think that overall the UK Government response to Covid has been either very or quite effective

APA Client Survey April 2022

  • 48% report that it is either likely or very likely they will make significant capital investment in their businesses in 2022/23

Commenting on the findings APA Chairman Martin Muirhead said:

“Having navigated Brexit and the pandemic, owner managed businesses are now confronted with the double challenge of rising inflation and increased energy costs. Many of these businesses have done well to survive the last two years. Having looked forward to a period of economic stability post-Covid they are confronted with the opposite. It is imperative that the UK Government take a more realistic view of our future trading relations with Europe recognising that labour shortages coupled with an altogether more challenging export environment pose a real threat to recovery.

Policy Makers also need to recognise that uncertainty remains across many sectors of the economy and that businesses want reassurance as well as clear and unambiguous advice and support. Adopting a flexible approach to business policy which recognises the many challenges facing owner managers will be key to a sustainable recovery.”

A copy of the detailed research report is available here.

What next?

If you would like more information, please email