UK SME contributions' to reach record high'

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UK SME contributions' to reach record high' (image credit: iStock/STILLFX)

The contribution of small to medium-sized enterprises (SMEs) to UK economic strength has been predicted to reach record levels by the end of the decade.

This is the conclusion of new research from Hampshire Bank Trust, which has published a study conducted in partnership with the Centre for Economics and Business Research (CEBR) and claimed this group's economic potential will exceed £217 billion per annum by 2020 - the highest figure ever recorded.

Overall, the research predicted there is now expected to be an 11 per cent annual increase in fiscal output from UK SMEs in relation to 2015 levels of performance (£196 billion) over the next four years.

The report also forecast a considerable swelling of SMEs based in London in the years ahead, with 444,880 UK SMEs recorded last year and this number set to rise to more than 530,000 by 2020. Sectors that are currently shown to be driving this growth are the capital's professional and administrative services industries.

Meanwhile, other major cities across the country have been forecast to witness a considerable boost in SME activities, with Manchester, Leeds and Bristol each singled out as being potential hotspots for growth.

Mark Sismey-Durrant, chief executive at Hampshire Trust Bank, commented: "Our report demonstrates the critical importance of SMEs as the engine room of the economy. Their sizeable contribution to the fortunes of the UK economy - growing to 27 per cent of total business contribution by 2020 - cannot be ignored.

"Our research with CEBR should be a source of optimism for the government and for employers as the strong future growth predicted suggests significant opportunity for investors, business owners and their employees."

Mr Sismey-Durrant went on to add that the impending announcement of Theresa May's government's first Autumn Statement must therefore focus on encouraging further growth within the SME segment, as these businesses provide a much-needed boost to the economy at a time of significant uncertainty.

Creating the conditions to help small businesses to flourish across the UK will be integral to offsetting the risks to the economy associated with Brexit and Mr Sismey-Durrant is adamant that more must now be done to support firms as they look to expand and take on new services and staff.