Retail and Wholesale
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The latest Small Business PMI, which monitors the challenges faced and progress made by small businesses in the manufacturing, services and construction sectors, highlighted a decline in business activity in October.
Last updated: 17 Nov 2020 2 min read
October's Small Business PMI showed a reversal of fortunes for UK SMEs, with overall business activity declining for the first time since June. This contrasted with a steady recovery during Q3 2020 and was led by a shrinking in output from consumer-facing service providers, linked to tighter restrictions on social mobility and hospitality amid a resurgence in the number of coronavirus cases.
SMEs were the hardest hit by weak and contracted activity in October, with the All-Sector Small Business Activity Index registering at 47.0 – below the 50.0 no-change level. Larger businesses and the rest of the UK private sector, however, were still in growth with an equivalent index of 52.2 in October.
Susan Fouquier, managing director of business banking, Scotland, at Royal Bank of Scotland, said: “We know that small businesses face different challenges than their larger competitors and the wider private sector, which comparatively saw growth in October. We will be proactively supporting our small business customers through this continuing period of uncertainty – as we have done from the start.”
Stephen Blackman, principal economist at Royal Bank of Scotland, also commented: “Business confidence looks set to remain in the doldrums, keeping companies in a cautious mode amid continued weak demand and nervousness around Brexit. Latest reports of a vaccine being rolled out in early 2021, if not earlier, point to light at the end of the tunnel for the UK’s struggling SMEs, but it’s still early days.”
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