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SMEs to have increased economic benefits in the north by 2020 10 November 2016

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Smaller businesses will contribute as much as 15 per cent more to the economy than in 2016 in both Manchester and Leeds, with Birmingham also seeing impressive growth.

Small and medium enterprises (SMEs) are some of the largest contributors to employment and economic growth in the UK, with firms in this sector having grown significantly in both number and influence over the last few years.

The Federation of Small Businesses says that SMEs represent 99.9 per cent of all private sector firms in the UK. With a total employment of 15.7 million, these companies represents 60 per cent of employment in the private sector, have an annual turnover of £1.8 trillion, and over the next four years, it looks like this is only going to improve.

According to new research from Hampshire Trust Bank in partnership with the Centre for Economics and Business Research (CEBR), by 2020, the volume of SME contributions across the UK will have increased markedly, with leading cities in the north at the forefront of this growth.

The data forecasts that by the start of the next decade, both Leeds and Manchester will have seen the economic contributions of SMEs increase by 15 per cent, well ahead of the 11 per cent growth that is expected to be in evidence across the UK as a whole, showing how the north is becoming a more favourable place for businesses of all sizes to operate in.

Manchester alone will see the contributions from smaller enterprises climbing as high as £14 billion as the spread of SMEs operating in the north-west city continues to increase, while Leeds will see SMEs contribute £6.25 billion.

Birmingham is also likely to see strong performance in terms of SME growth in the coming years, with the report stating that it will experience a rise of 11 per cent in SME contributions, rising to £6.5 billion by 2020.

Mark Sismey-Durrant, chief executive officer at Hampshire Trust Bank, said that SMEs are the "engine room" of the British business sector as he highlighted their importance in improving the country's economy for years to come.

Nina Skero, managing economist at CEBR, said: “This study demonstrates there is a positive story to be told about the UK’s SMEs and it is encouraging to see such strong growth being mirrored outside of the capital.

"We expect the importance of SMEs to the country’s economy to increase in the coming years and hope this research will inspire business leaders across the UK to invest in their growth strategies.”

Are you an SME looking for an exciting new office space that works for your business? Visit our website to find out more information.

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