SMEs in the UK have lost £8.3bn in revenue
over the last 12 months because of equipment they have put off
replacing, according to research.
GE Capital’s SME Capex Barometer also shows
businesses plan to invest £74.9bn in capital expenditure over the
next twelve months to facilitate expected growth.
The survey of 1000 SMEs across Europe showed
92% of businesses intended to invest, with an average spend of
£73,805 on items including manufacturing equipment, commercial
vehicles, company cars, IT and office equipment.
One in eight companies in the UK said they had
lost significant income because of dated or inefficient equipment
they had put off replacing during the downturn.
According to the survey, businesses lost
£8,301 on average through inefficient equipment, equal to £8.3bn of
lost revenue across the UK.
A quarter of companies surveyed in the UK said
replacing old equipment was the reason behind investment while more
than a third said enhancing efficiency and productivity was the
IT hardware and manufacturing and plant
equipment represented the most pressing need for UK companies. 85%
of those surveyed intend to invest a total of £8.6bn upgrading and
replacing computing hardware and 81% said they would invest in
manufacturing and plant with a total proposed spend of £36.5bn.
John Jenkins, chief executive of GE Capital UK
said: “Despite popular belief, the appetite for investing in growth
amongst UK SMEs is actually very strong, with many businesses
having reached a tipping point where putting off investment is no
longer possible without compromising their ability to create
“Many businesses not planning to invest in the
next year have already recently upgraded, further illustrating that
we are in the midst of significant renewal.”
The investment intention of European SMEs
outstrips the £74.9bn set aside by UK businesses with German and
French looking to invest €145bn (£130.7bn) and €101bn (£91bn)
Germany SMEs intend to invest an average of
€120,361 (£108,500) over the next 12 months, 30% more than UK
businesses, according to the survey.
The result mirrors the findings of this
month’s Siemens Financial Services
investment confidence survey which showed UK lagging behind
both European and global businesses.
Jenkins added that the disparity between the
UK and its European counterparts shows there is room for
improvement in SME investment in the UK, especially in supporting
the smallest companies only 81% of which intend to invest capex
over the next 12 months.