AXA Business Insurance

AXA Business Insurance

June 26, 2013 09:00 ET

UK SMEs Suggest the Future's Looking Brighter

LONDON, UNITED KINGDOM--(Marketwired - June 26, 2013) - AXA Business Insurance's annual "Optimism Index" shows that 37 per cent of UK SMEs are more optimistic about their business than a year ago. Eight out of ten (81 per cent) are currently upbeat about the general state of their business and the majority are expecting growth over the coming year.

The index, compiled by AXA, one of the largest business insurers in the UK, reveals that this time last year 35per cent of SMEs were optimistic about the growth of their business over the following six months. This year this figure has risen to 63per cent.

This optimism is reflected in their planned investment in staff and other resources:

  • 38 per cent of SMEs are planning to take on new employees in 2013 – a rise of over 300 per cent on last year's figure of 9 per cent (although in reality 34 per cent ended up recruiting)
  • 53 per cent are planning to invest in new equipment or other resources (not people) this year - a doubling of last year's figure of 25 per cent

Alongside this, 38 per cent of SMEs believe they will make more profit this year than they did last year and a further 38 per cent believe profit levels will be similar. The number who would bet their house on their company making a profit this year has risen by about a third - from 13 per cent to 17 per cent.

And there has been a rise of around 25 per cent of those who think their personal earnings from the business will go up year on year.

Over half (58 per cent) of UK SMEs believe 2014 will be an even better year than 2013.

While the overall picture is much improved from this time last year, Government spending cuts were cited as a key reason for those with a less optimistic outlook followed by the economic situation in the Eurozone.

Optimism by sector1

The index looked in more detail at four broad sectors within the SME marketplace and, while the picture was again largely optimistic compared with last year, there are some marked differences between sectors. The retail and distribution sector showed the highest levels and biggest rise in optimism about growth year on year. While building trades and industrial, while still more optimistic year on year, fell behind the other sectors in general levels of optimism around growth.

Numbers of SMEs who are either very or quite optimistic about growth in the next six months
2012
%
2013
%
Retail & distribution 35 71
Building trades & industrial 34 48
Business & professional services 34 67
Personal services 41 67
Numbers of SMEs planning a growth in number of employees
2012
%
2013
%
Retail & distribution 7 47
Building trades & industrial 19 32
Business & professional services 8 34
Personal services 7 43
Numbers of SMEs planning investment in equipment/other resource
(not employees)
2012
%
2013
%
Retail & distribution 19 54
Building trades & industrial 32 55
Business & professional services 24 49
Personal services 35 56

Looking forward to 2014, SMEs in retail & distribution were the most optimistic about the outlook (68 per cent believed it would be a better year) while those in building trades & industrial were the most cautiously optimistic with 52 per cent predicting a better year.

Regional optimism

The index also looked at a breakdown by UK countries revealing SMEs in Scotland to be the most optimistic with 88 per cent (nearly 10 per cent above average figures) stating they are generally optimistic about the state of their business. Statistics from BIS2 also suggest that the number of SMEs in Scotland is growing more rapidly than elsewhere.

Interestingly, while SMEs in Wales are less optimistic generally, they are significantly more likely to be planning on taking on new employees in the next year.

Regional breakdown of SMEs' levels of optimism and plans for investment this year
England
%
Scotland
%
Wales
%
N Ireland
%
Optimistic about state of their business 81 88 76 75
Optimistic that 2014 will be better than 2013 59 50 47 N/A
Planning to take on employees this year 38% 40% 47% N/A
Planning investment in equipment/other resource (not people) this year 52% 62% 47% N/A

Darrell Sansom, Managing Director at AXA Business Insurance says; "We all know that the number of SMEs in the UK is rising rapidly and they continue to form the core of British business. We also know that many small businesses have really struggled in the recent economic downturn so it is extremely encouraging to see that the level of optimism among SMEs is rising.

"As an insurer we aim to protect all of these businesses against the unforeseen while they focus on turning that optimism into business success."

Notes to Editors

Research was carried out on-line in June 2013 among 500 SME business owners or decision makers in the UK.

About AXA Business Insurance

AXA Business Insurance is part of AXA Insurance UK plc, which belongs to the AXA group of companies. With us, you choose the business insurance that's right for you. We offer public liability, employers' liability and professional indemnity insurance online to start ups, sole traders, self-employed people and small businesses. In addition we offer van insurance and landlord insurance. AXA Business Insurance also runs Business Guardian Angel which provides resources to help protect and grow small businesses.

You can follow AXA Business Insurance on Twitter @AXAbizteam, for business insurance help, and @AXABizAngel, for the latest business news. You'll also find AXA Business Insurance on Google+ and Facebook – and you can watch expert guides and business case studies on the AXA Business Insurance YouTube channel.

About AXA About AXA

The AXA Group is a worldwide leader in insurance and asset management, with more than 163,000 employees serving 102 million clients in 57 countries. In 2012, IFRS revenues amounted to Euro 90.1 billion and IFRS underlying earnings to Euro 4.3 billion. AXA had Euro 1,116 billion in assets under management as of December 31, 2012.

In the UK AXA operates through a number of business units including: AXA Wealth, AXA Commercial Lines and Personal Intermediary, AXA Personal Direct and Partnerships, AXA PPP healthcare, AXA Ireland and an independent distribution business Bluefin. AXA employs over 12,000 staff in the UK.

The AXA ordinary share is listed on compartment A of Euronext Paris under the ticker symbol CS (ISN FR 0000120628 – Bloomberg: CS FP – Reuters: AXAF.PA). AXA's American Depository Share is also quoted on the OTC QX platform under the ticker symbol AXAHY.

The AXA Group is included in the main international SRI indexes, such as Dow Jones Sustainability Index (DJSI) and FTSE4GOOD.

It is a founding member of the UN Environment Programme's Finance Initiative (UNEP FI) Principles for Sustainable Insurance and a signatory of the UN Principles for Responsible Investment.

1A minimum of 100 businesses per sector were polled
2Department for Business Innovation & Skills Statistical Release – 17 October 2012

Contact Information

  • Enquiries:
    Miranda Seymour
    AXA Business Insurance press office
    0208 246 6853/07966 549413