The UK is lagging behind France and Germany when it comes to SME investment in growth.
According to bold figures by GE Capital, UK SMBs are planning to invest a total of £74.9bn in capital expenditure over the coming year on a range of items including IT, but it also claimed that firms had missed out on more than £8bn of new business due to outdated IT equipment.
The firm’s SME Capex Barometer study revealed that 92 per cent of those questioned said they planned to invest in their business, spending an average of £73,805 on equipment such as IT, manufacturing kit, commercial vehicles and office equipment.
A total of 96 per cent of medium-sized firms (50 to 249 employees) and small firms (10 to 49 employees) were planning to invest. Micro businesses (two to nine employees) were more cautious with 81 per cent looking to invest over the coming year.
But despite the seemingly positive figures, UK SMEs remain less confident than their European counterparts, with SMEs in Germany and France looking to invest £130.7bn and £91bn respectively.
GE Capital claimed UK firms were looking to modernise and update equipment after suffering a loss of revenue, averaging £8,301 per business. According to the research, new IT hardware is the most pressing need for SMEs, with 85 per cent of companies stating they were looking to invest a total of £8.6bn in upgrading and replacing existing company laptops, servers and other hardware.
John Jenkins, chief executive of GE Capital, said: “Despite popular belief, the appetite for investing in growth among UK SMEs is actually very strong, with many businesses having reached a tipping point where putting off investment is no longer possible without compromising their ability to create revenue. Many businesses not planning to invest in the next year have already recently upgraded, further illustrating that we are in the midst of significant renewal.
“However, when compared to our findings in other markets such as Germany and France, where SMEs are looking to increase capital expenditure to a much greater degree, it’s clear that there is still room for improvement, particularly in supporting the smallest businesses with their plans for growth.”
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