The Zurich SME Risk Index study, which surveyed more than 500 senior staff in SMEs from a range of sectors, found that 16% of small firms in the UK consider themselves to be at high risk of going out of business within the next year.
Predictably, the high street’s recent woes are affecting confidence – more than a fifth (21%) of retailers surveyed consider themselves at high risk, up from just 12% in the previous quarter. And who can blame them after Comet went under in December, and was quickly followed by Jessops, HMV and Blockbuster in the first few weeks of January?
Around a quarter (24%) of IT and telecoms SMEs reckon they are at similarly high risk (that’s up from just 11% in the previous quarter). Again, with businesses everywhere looking to cut costs, a pricey video conferencing system is not going to be top of the list of priorities.
And then in the construction sector, a massive 37% of firms think that they could go out of business this year. Their fear is no doubt based on recent construction figures, and given how much the government has reined in spending on infrastructure, a lot of firms will certainly be feeling the pinch.
Richard Coleman, who heads up the SME division of Zurich, said: ‘There’s no doubt that it’s still tough out there for UK SMEs, and these figures seem to indicate rising levels of concern, as increasing numbers of businesses appear at risk of succumbing to financial pressures – particularly in vulnerable sectors such as retail and construction.’
Today’s news that UK GDP contracted by 0.3% in the final quarter last year will not have done much to raise these small firms’ spirits. Still, when you’re at rock bottom, there’s only one way to go…