Solid expansion of
Key Findings
Recovery in overall
Service sector remains the main growth engine
Spending on more energy efficient business processes is projected to rise at a fast rate among SMEs, with 18% planning to invest in the next year and 41% within five years
Over half of
Business activity among
NatWest's index is a key indicator of the health of the
The recovery in overall SME output levels was driven by improving order books, with new work increasing for the fourth month running in March. Leading the way, the services sector recorded the fastest upturn in business activity in March, recording 53.2, followed by the manufacturing sector, which recorded 51.4. SME construction output meanwhile near-stabilised in March at 49.6, which also represented an improved trend after stronger declines in activity in the second half of last year.
In the latest survey, SMEs reported another sharp rise in their average cost burdens, especially those in the service economy, largely due to rising salary payments and transportation costs. However, the overall rate of input price inflation was the slowest since
Business activity expectations remained upbeat in March, with SMEs confidence holding close to February's two-year high.
Renewable energy investment plans
The NatWest Sustainable Business Tracker found that there was a rise in the proportion of SMEs that have already invested in renewable energy investment plans compared to the same period in 2023.
The survey also found that over half of
'Businesses have shown great resilience in the face of challenging market conditions as rocketing inflation and then rising interest rates made their mark. So, it's good to see that firms are now reporting much more muted inflationary pressures at the same time as five months of growth in a row. When it comes to job creation, the picture is more varied. Higher levels of SME employment largely reflects greater recruitment in the service economy, while hiring trends were much more subdued in manufacturing and construction. But optimism about future activity is widely shared with both services and manufacturing registering scores of above 70.'
'It's really encouraging to see small businesses have had a strong start to the year and remain optimistic about their future growth. The recovery in output has been driven by improving order books, with new work increasing for the fourth month running in March. This suggests that falling inflation and hopes of lower interest rates is leading to an upturn in economic conditions, which is likely to support growth in the year ahead.'
'These findings show that over half of
Download the latest NatWest SME PMI Tracker
Download the latest NatWest SME PMI Tracker
PMI Tracker
Notes for editors
The NatWest Sustainable Business Tracker is a quarterly report, designed to monitor business performance and sustainability actions at
For more information, please contact:
Media Relations Manager
07974864900
lucy.chislett@natwest.com
Notes to editors
About the NatWest Sustainable Business Tracker
The NatWest Sustainable Business Tracker is a quarterly report, designed to monitor business performance and sustainability actions at
The panel of around 850 small and medium sized enterprises is stratified by detailed sector, based on contributions to GDP.
Survey responses are collected by
The SME PMI indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted. Indices are compiled for a range of survey variables, including business activity, new orders, employment, input costs, prices charged, suppliers' delivery times and future activity.
The SME PMI data for March were collected 12 -
SME Sustainability PMI data are compiled on a quarterly basis. The SME PMI data are compiled on a monthly basis. The latest SME Sustainability PMI data were collected in
For further information on the PMI survey methodology, please contact economics@spglobal.com.
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