Directors of UK companies are largely positive about the conditions for growth but are concerned about infrastructure and potential referenda on both the EU and Scotland, according to a report by the Business Growth Fund (BGF).
The inaugural BGF Growth Climate Index is based on a poll of 350 UK board directors. It suggests that the vast majority (82%) believe conditions for growth have improved in the past quarter.
When asked what needs to be done to retain positive conditions for growth, one-quarter of respondents said investment in physical infrastructure is the top priority.
When asked what issues were holding back growth in UK business, 69% said a lack of access to the right talent was the biggest problem. This was far more than cited excessive red tape as the main challenge (30%).
Uncertainty about the UK’s continued role in the EU was also high on people’s list of concerns. Despite continued stalling growth in the EU and the current crisis in Greece, 82% of those asked still said the country’s membership of the EU was good for British businesses.
The prospect of a second Scottish Independence vote is also a concern for many board directors across the UK. Almost all (80%) agreed that it would have a negative effect on conditions for British businesses.
One director who was polled as part of the report was Andrew Guy, chairman of Bulldog Hotel Group and CEO of Ed’s Easy Diners.
He said that, while “the situation for SMEs is improving”, more needs to be done in the coming 12 months to maintain access to talent and consumers.
“Access to skilled future employees is critical to growing companies, and something that Government must continue to help to address,” he said.
“In addition, businesses looking to expand and create jobs must have a robust and first-class infrastructure to support them. We now need some political stability, coupled with a determined effort to move forward with improvements in the UK’s physical infrastructure.”
BGF chief executive Stephen Welton added that SME are crucial for the wider UK economy and as such we need to “listen to their needs to create a strong growth environment”.
“The first half of this year was plagued with uncertainty, but now that the Election is behind us and we have a majority Government with a focus on economic growth, optimism around business is high,” he continued.
“Despite this, there are causes for uncertainty on the horizon in the form of Europe and Scotland. British businesses need to focus on doing what they do best – innovating, exporting and being as ambitious as they can be.”