SME Growth: Crisis, what crisis?
1st September 2023
Now that we are well into preparing 2023 year end accounts for our business client, we are getting are a proper feel of what is happening out there growth wise. As can be seen from the above, SME’s had a strong 2022, growing by 11%, as they caught up lost sales from the Covid years. Results so far for 2023, however, are coming in at a more modest 4%.
So what can we deduce from this? Well it looks good at face value, but of course inflation escaped its usual 2% plus or minus 1% target range in early Summer 2021. Reacting to the Ukrainian war, it then peaked at 10% in October 2022, before then falling (down to around 7% at the time of writing). So, not unsurprisingly, SME growth is trying to follow underlying inflation, as businesses pass on their input cost increases to their customers through price rises. Our clients therefore are generally not growing in real terms at the moment, but then this is probably not surprising given the recent headwinds that they have had to navigate through. This is not great news, but neither is it the crisis we keep hearing about every time economists at the International Monetary Fund point their crystal balls in our direction.
Disclaimer - All information in this post was correct at time of writing.
