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Amazon Study Shows UK Sellers Brace for Inflation

The first SME Growth Tracker of 2017, a quarterly report by Capital Economics commissioned by Amazon UK and Enterprise Nation that assesses growth prospects and views on the broader UK economy from small and medium-sized enterprises (SME), has found that SMEs have raised their revenue growth projections for the third quarter in a row – and are now forecasting +2.3% revenue growth for the coming 12 months. The research, based on a YouGov survey of over 1,000 UK SMEs, was announced at the Amazon Academy in Manchester today, attended by hundreds of small business leaders. A summary of key findings are available here.

“We are seeing a big rebound in confidence amongst British SMEs after a significant decline in December, but small businesses leaders remain concerned about the impact of rising supply costs and higher price inflation,” said Simon Johnson, UK Director of Seller Services, Amazon. “Small businesses are optimistic but do see potential risks, and that’s one of the reasons we’re running the Amazon Academy programme – with an event in Manchester today – to help them boost growth, productivity and exports by using digital tools and services to better serve customers.”

The report revealed today that the SME Confidence Index score for business leaders’ own companies has turned positive, up to +3 in Q1 from -4 in Q4 last year. However broader sentiment remains negative, with SME Confidence Index scores for their respective industries at -2 (compared to -9 in Q4 last year), and for the wider UK economy, at -11 (compared to -15 in Q4 last year).

SME confidence in their own companies strong across the UK, except in Wales 
Across the regions, North East SMEs expect the sharpest improvement in business conditions for their own companies in the coming twelve months, with an SME Confidence Index score of +11, well above the national average. In contrast, Welsh SMEs are the only businesses, on average, expecting conditions for their own company to deteriorate in the coming year, with an SME Confidence Index score of -2.

SMEs brace for higher supply costs and price inflation 
More than three-in-four SMEs (78%) believe higher price inflation is a risk to their business in the year ahead, with SMEs on average expecting to raise prices +2% in the coming 12 months. This reflects SME perceptions of steadily increasing supply costs, up +2.0% in the past twelve months and expected to increase by a further +2.5% in the year ahead.

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Financial services SMEs predict largest growth, whilst manufacturing SMEs show the strongest confidence 
Manufacturing SMEs show the greatest turnaround in confidence since the end of last year and have the strongest confidence across all SME Confidence Index scores. In particular, manufacturing is the only sector to expect the wider UK economy to improve in the year ahead. However, SMEs in the financial services sector predict the largest revenue growth in the coming year (+3.1%), with hospitality & transport SMEs coming second (+2.7%), and health & education third (+2.6%).

Emma Jones MBE, founder of Enterprise Nation and HM Government’s Crown Representative for Small Business, added: “The SME community powers Britain’s economy and continues to show resilience in the face of uncertain times, but the Government must take heed of increasing concerns about the negative impact of rising supply costs on small business. This year in particular, they are facing increasing responsibility for a number of issues including auto enrolment for pensions. We want to make sure the Government understands the important role they play in the British economy and listens with conviction to their opportunities and challenges.”

Source: Amazon UK Press Release

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to