SMEs forecasting 10% growth in profits in 2023, finds HSBC

Research by high street bank, HSBC, has revealed that UK SMEs are forecasting increases in profits and revenues in 2023 despite economic woes.

Amid the threat of a recession, more than one in three business owners (38%) are forecasting a 10% jump in profits, rising to two-thirds (67%) for the professional services sector. Nearly half (47%) of business owners running SMEs are also expecting revenue to increase, with a third expecting 20% revenue growth, HSBC found.

HSBC’s research found that over three quarters of business owners (76%) had put solutions in place to mitigate the impact of financial threats such as rising inflation, falling household spending and wage inflation and rising energy costs. Nearly half (45%) plan to increase prices and one in five (23%) were reducing their energy consumption.

Peter McIntyre, Head of Business Banking at HSBC UK, said:

“Despite the challenges of a turbulent economic climate in 2022, small businesses are displaying strong signs of resilience and growth.

“HSBC UK remains committed to supporting customers with their growth plans as well as helping them to mitigate financial risk. A big part of that is providing the tools and information to help customers improve cash flow management, tackle supply chain issues and manage their overheads such as energy costs.”

HSBC’s research has previously revealed the extent to which financial difficulties were affecting the wellbeing of business owners, with 26% reporting that the cost of living crisis was impacting their health.

HSBC commissioned an online survey, conducted by YouGov, of 604 business owners representing SMEs with turnover below £5 million to conduct its research. Fieldwork was carried out between 26 October and 7 November 2022.