21% of UK SMEs have shrunk

In fact, 34 per cent of SMEs say they face a medium to high risk of going out of business within the next year. 

The findings come from Zurich’s latest ‘SME Risk Index‘, which found that 60 per cent of SME decision makers are actually not that confident that the economic situation will improve within the next quarter, a significant 12 per cent increase over the past three months. 

However, despite these figures, concern about overall business risk have fallen to their lowest level since the Zurich SME Risk Index began in 2012, down from 42.17 points in July 2014 to 39.92 points this month.

This fall in concern could be due to recent concerns about business regulation and compliance, a significant ten per cent drop on July 2014. 

Furthermore, 22 per cent are now worried about supply chain exposures, while 37 per cent are worried about workforce challenges such as availability of talent and capacity.

Richard Coleman, director of SME at Zurich, said: “It’s great to report again that SMEs are continuing to feel better about the risks their businesses face, reflecting wider signs of growth in the UK economy. However, it’s clear that the wider economic environment is a source of increasing concern for SME’s even as their concerns over some of the more specific risks reduce.

“With one third of SME decision makers still saying they could face going out of business within the next year, it’s clear that financial difficulties are again a key worry for Britain’s small and medium businesses.”

By Shané Schutte

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