Optimism among the UK’s SMEs has risen for the third consecutive year, according to new research from American Express.
Nearly 70% of business leaders are confident about their future, up from 67% in 2023 and 65% in 2022. The biggest boost in sentiment came from micro enterprises (1-9 employees), where confidence grew from 62% last year to 67% in 2024.
The annual Barometer survey, conducted in collaboration with Small Business Saturday UK, included responses from 1,000 SME decision-makers and sole traders. It revealed that nearly three-quarters (71%) of SMEs believe their business is in good shape — a 5-point increase since 2022.
This rise in confidence is leading to growth-focused strategies. Over half (52%) of SMEs plan to invest more in their business over the next year, with a strong focus on improving customer engagement. More than half (54%) aim to enhance communication with customers, 42% plan to offer additional services, and 33% are set to introduce more special offers.
Interestingly, SMEs believe that customers are now less driven by price when making purchasing decisions, with only 51% of respondents citing price as the main factor, down from 57% in 2023.
Looking ahead, optimism continues, with 57% of businesses expecting stronger sales in the fourth quarter of 2024 compared to the same period in previous years.
Amanda Salt, Vice President of Small & Medium Enterprises at American Express, said: “It’s incredibly positive that more SME businesses are feeling confident about the future. While it remains a challenging landscape, business owners continue to show remarkable resilience as they focus on growth and delivering for their customers.”
Michelle Ovens, Director of Small Business Saturday UK, echoed this sentiment, highlighting the importance of small businesses in driving both local communities and the UK economy forward.
AI is also set to play a significant role in SME growth. Almost half (45%) of respondents plan to adopt AI solutions over the next year, with medium-sized businesses leading the way (64%). AI is being utilised for a variety of purposes, including improving marketing (49%), content development (49%), customer service (36%), and making accounting processes more efficient (34%).
With strong signs of growth and an increasing interest in AI, UK SMEs are positioning themselves to thrive in a challenging but opportunity-filled market.