Small and mid-cap positivity wavers as outlook on UK economy declines

The latest edition of the QCA/YouGov Small & Mid-Cap Sentiment Index reveals that small and mid-cap companies remain positive about their own prospects but this optimism is at its lowest point since 2012.

Outlook on the UK economy is uncertain with a mean rating of 48.5 from companies (where 50 is completely neutral). This sentiment has declined steadily since peaking in 2014 at 69.3.

Many companies (as indicated in survey respondent comments) cite Brexit and political uncertainty as continuing to contribute to the neutral outlook on the UK economy.

Other key findings, 76% of small & mid-caps are expecting to increase jobs, but 19% anticipate decreasing employment, up from 10% six months earlier. 37% of surveyed companies are planning to raise capital which is down from 47% when asked six months earlier. Companies predict average sales growth of 17%, down from 19.2% a year earlier.

Tim Ward, Chief Executive, Quoted Companies Alliance said, “The UK’s small & mid-cap companies remain optimistic and resilient about their own prospects and a large majority expect to increase employment in the coming 12 months.

But Brexit and the ongoing political uncertainty in the country are contributing to a neutral outlook on the UK economy with business looking to see how things will develop in the second half of 2019.”