UK and European SMEs shrug off concerns about global economy with more than half eyeing new markets in 2020

More than half of European SMEs are looking to break into new markets in 2020 despite widespread concerns over the global economy, new research by global corporate finance house Clearwater International reveals. 

A major new study surveying 2,100 Western European SMEs finds that 52% are looking to do business in another European country this year, with 44% eyeing new markets further afield.

And despite the UK’s impending exit from the European Union, more than four in 10 (45%) UK-based firms say they are considering new markets on the continent, with 49% looking elsewhere

Italian firms are currently the most expansive, with 69% of SMEs looking to set up in another European country, closely followed by Ireland (63%) and France (60%).

The results, which are part of a report commissioned by Clearwater International called “Growth Europe”, indicate firms are not allowing slowing global growth, Brexit or trade tensions to disrupt their short-term growth plans. 

Looking longer-term, more than half of firms (54%) surveyed rate their prospects over the coming 5-10 years as ‘very positive’, with a further 39% rating the outlook for business as ‘positive’.

Irish SMEs are most optimistic about the coming decade, with 81% rating their long-term prospects as ‘very positive’, followed by the UK (62%) and Germany (56%).

More than half of firms surveyed are looking to hire more staff (54%) and invest in new equipment (55%), while nearly two-thirds (62%) believe they have a lot of spare capacity to take on more business. 

Moreover, the three biggest challenges facing firms over the next 12 months – recruiting skilled staff (33%), maintaining market position (32%) and finding new customers (28%) – suggest they are, generally speaking, confident, competitive and in rude health.

As well as being optimistic about their own prospects, three-quarters (76%) of firms which took part in the research believe their respective economies will perform well over the next year. Some 78% of UK SMEs are fairly or very optimistic about the country’s economy.

David Weavers, Clearwater International Partner, UK, said: “A lot has been said about the supposed sluggish performance of European companies in comparison to their rivals in the US and China. But the results of our study show that there is a lot to be optimistic about in both the UK and continental Europe 

“The biggest challenges facing SMEs at the moment, such as difficulties in meeting expansionary recruitment targets, relate to things which may constrain growth, but aren’t necessarily suggestive of excessive downward pressures.  

“As such, the data seems to indicate that companies are looking to the future from a position of relative strength and a desire to maintain or enhance their current market position, rather than from a position of weakness.

“If their confidence is matched by good financial performance, it will no doubt give the European economy a timely boost.”