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According to the SME Health Check Index, the health of small to medium businesses in the UK has risen to its highest level in 18 months.

The Index is a new quarterly economic index put together by the Centre for Economics and Business Research Limited (Cebr), a leading economics consultancy. They also worked in association with CYBG PLC, owner of Yorkshire and Clydesdale banks.

The index measures business performance and the economic environment affecting SMEs like business costs and revenue.

There was a previous drop in the index in the first quarter of this year. However this increase shows that SMEs are pulling it back as the year goes on. During the second quarter, SMEs have seen improvement in six out of eight key performance indicators which have caused the index to rise by almost 12 points.

Lately, there has been a falling number of business bankruptcies and finance providers are increasingly lending SMEs money showing that confidence is growing.

Oliver Kolodseike, senior economist at Cebr said: “The significance of SMEs to the economic well-being of the UK is indisputable and it is therefore encouraging that the SME Health Check Index emerged from its first quarter weakness and reached a one-and-a-half year high. It is particularly encouraging that lending to SMEs has picked up, thereby supporting businesses in their growth aspirations.”


A good sign with warnings

CEO at CYBG, David Duffy welcomed the changes but warned that we are not totally out of the woods yet where SMEs’ health is concerned. He said: “We greet these results with cautious optimism. This quarter’s index marks a return to the improving SME operating environment we saw throughout 2016 following a fall in the index in the last quarter.

“However there is no room for complacency. The UK’s future economic success will depend in no small part on the strength and general ‘health’ of our SME businesses – securing a path to sustained and stronger growth among SMEs is vital for unlocking improvements in the UK’s overall productivity and business competitiveness.”

CYBG recently committed £6 billion of lending from now until 2019 to help boost SME growth in the UK. “As banks we have a duty to help promote this confidence and ensure that we play our part in supporting local businesses to grow. The report’s findings also reinforce the need for the government to continue its commitment to the Northern Powerhouse and Midlands Engine strategies and keep pushing these ambitions to the forefront.

“These two key strands of the government’s Industrial Strategy are a vital part of delivering higher economic growth in the regions and there is encouraging momentum from stakeholders all over the North of England and the Midlands to ensure their success. However, as this Index suggests, it’s not an easy task – while the North East is showing an improvement and tops our regional table, Yorkshire and the Humber is down slightly, with business confidence and capacity both taking a knock.”

Eight out of nine English regions have shown some improvement with their index score as well as Scotland, Wales and Northern Ireland. North East, Wales and East Midlands have come out on top with their scores. However, Yorkshire and the Humber dropped slightly in the rankings during the second quarter.

Graeme Sands, head of business banking at CYBG said:  “Despite the uncertain political and economic environment, rises in the Index this quarter show that there are still opportunities for SMEs to grow and thrive and we are committed to supporting businesses to develop and achieve their potential.”


Have you noticed a difference in business confidence lately? Do you think it will continue to grow for the rest of this year? Let us know what you think.          

About The Author

Kara Copple

An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.

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