The health of SMEs in North West has dropped in the second quarter of 2018, according to latest research by CYBG, in partnership with leading economic consultancy, the Centre for Business and Economics Research (Cebr).

The report has revealed that the SME Health Check Index in the North West has fallen five points to 25 in the second quarter. This is due to the proportion of SMEs operating below capacity reaching the highest level since data collection began in 2014, as well as a decline in the lending indicator and employment falling by nearly 20,000 between the first and second quarters of 2018.

The SME Health Check Index is designed to measure SME business performance and the business and macroeconomic environment within which SMEs operate.

At a national level, the reports highlights that the health of UK SMEs was stable for the second quarter of 2018, but at 47.1 points, the Index is at its second lowest level in four years.

Key data shows the economy did regain some momentum in Q2. Following the wide spread disruption caused by adverse weather at the start of the year, activity was pushed into the second quarter, particularly in the construction sector. However, despite the improvement in the GDP and capacity indicators, there was no material increase to the Index score due to the slowdown in employment growth and fall in lending.

Gavin Opperman, Group Customer Banking Director, at CYBG, said:“The latest SME Health Check Index demonstrates just how much can change for SMEs quarter to quarter. Our last report indicated a difficult start to 2018 and the weather conditions didn’t help matters, but the second quarter does provide some grounds for optimism. GDP has made gains, and the Index remains steady, dropping by only 0.5 points. This all suggests the UK economy could be on the road to recovery.

“However, on a closer look, there are still indicators causing concern, which doesn’t provide as positive a story across the UK. Employment growth is down, due to a tightening in the labour market, and, most important for us, lending has also dropped 18 points to 38. Our critical task is to ensure that the operating environment for SMEs – exporters, importers and entirely domestically focused businesses alike – is as uninterrupted as possible. As a lender, we are doing our bit and remain committed to supporting SMEs navigate this challenging market and are on track to meet our £6bn three-year lending pledge.”


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