‘Survival Paramount’ for British SMEs

LONDON, November 28, 2011 -

Travelex Reveals Top Ten Concerns for UK Small Businesses

• Macro-economic turmoil is the no. 1 worry for British importers and exporters.
• Almost half of SMEs have little faith in ‘export-led’ recovery.
• 62% unaware of Project Merlin.

Small and medium sized businesses (SMEs) are most worried about broader economic issues such as the global economy (84%), cheaper competition (70%), and currency volatility (65%), according to the latest data from the Travelex Confidence Index.

The findings also revealed that 59% of SMEs had little to no confidence in the current economic climate, representing a 32% drop from June and the lowest level of confidence since the TCI began in March 2010.

Top 10 concerns for SMEs^[1]

1. Overall health of the economy (84%)
2. Cheaper overseas competition (70%)
3. Currency volatility (65%)
4. Reduced budgets (64%)
5. International regulation/compliance (44%)
6. Credit availability (43%)
7. Efficiency of international payments (39%)
8. Political influence (36%)
9. Reduced sales (30%)
10. Customer loss (27%)

Although credit availability came in at no. 6, SME awareness of Project Merlin is extremely low; 62% had not heard of Project Merlin and of those who had, only one in 20 believed it has helped them obtain credit.  

Equally worrying ahead of the Autumn Statement is the fact that 66% of SMEs don’t believe the government’s efforts to drive an export-led recovery have affected their business, with 48% thinking an export-led recovery unlikely despite policy-makers’ sustained campaign to depreciate the pound. With sterling fluctuating amidst an uncertain global outlook, external risks seem to have reduced the efficacy of the Coalition’s current policies.

Paddy Earnshaw, Customer Director of Travelex Global Business Payments, comments on the recent data:

“The results of this survey are not reassuring. Survival is paramount in the current climate; British businesses are worried about the basics of simply staying afloat.

“Access to credit is certainly important, and it is worrying that nearly two thirds of SMEs don’t know what Project Merlin is.  It is not, however, the only concern for SMEs trying to navigate a hostile economy. If the government is serious about leading an export-driven recovery, then it should not focus solely on credit availability when there are other pressing issues to consider.”

As well as the lowest confidence level on record, the data showed that 68% of SMEs now think a ‘double-dip’ recession is likely, an increase of 80% compared to last November.

Earnshaw continued: “It is not surprising SMEs are pessimistic about the health of the global economy given Eurozone woes.  What is surprising is how little we have heard to date about solutions that address the real concerns of British SMEs. The Chancellor needs to set out clear plans in his Autumn Statement that tackle their fears over growth and economic volatility.

We have to question whether or not the government’s policies are actually addressing the needs of the SMEs they are meant to support.”

^[1] Question: Which of the following issues do you think are most likely to affect the growth and development of your business?

Notes to Editors

About Travelex Global Business Payments

Travelex Global Business Payments is a global foreign exchange specialist providing the payment and receipt of domestic and international funds for businesses of all sizes. For more than 30 years, Travelex Global Business Payments has provided clients with sophisticated market knowledge, leading edge technologies and practical and innovative solutions tailored to individual requirements. Every year, Travelex Global Business Payments processes payments around the world over 35,000 businesses to 1 million beneficiaries.

Travelex Global Business Payments was acquired by Western Union in November 2011.  

Travelex is a registered trademark and is used by Travelex Global Business Payments Limited and its group companies under licence.

Visit www.travelexbusiness.com for more information.

About Travelex Confidence Index

The Travelex Confidence Index (TCI), released quarterly by Travelex Global Business Payments, provides a key indicator on international trade and economic conditions. Conducted by independent research company TNS-RI, the Travelex Confidence Index tracks the views and sentiments of the UK’s SME importers and exporters across industry sectors and UK regions. The TCI is the only piece of research available that regularly tracks the UK’s SME importers and exporters.

For more information, please visit www.travelexbusiness.com//uk/confidence-index

Travelex Global Business Payments Limited is authorised by the Financial Services Authority under the Payment Services Regulations 2009 (Ref no: 536611) for the provision of payment services and is also a registered MSB with HM Revenue & Customs (Reg no: 12122416).

For further information or interviews, please contact:

Jennifer Berlin                      T: +44(0)208-415-4204
Travelex Global Business Payments    E: Jennifer.Berlin@Travelex.com

Lauren Franze/George Parrett         T: +44(0)20-7566-6750  
Redleaf Polhill                      E: tgbp@redleafpolhill.com

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