TODAY, Xero has announced the latest findings of its quarterly Small Business Index (XSBI).
Based on aggregated data from hundreds of thousands of UK small businesses, the index shows that Scotland is outpacing the rest of the country in terms of growth, playing a key role in improving economic growth in the UK.
Despite Scottish success, a continued national sales slump and persistent late payments continue to burden SMEs across the country.
The findings include:
- Scotland leads the way: SMEs in Scotland saw above average wage growth at 3.6% (y/y) this quarter (compared to 3.3% y/y nationally). At the same time, Scotland forged ahead of the rest of the country with a 5.7% (y/y) increase in sales over January and February (compared to 0.5% y/y nationally).
- Dampened outlook nationally: On average in the UK, small business sales growth remained low, having risen only 0.5% (y/y) in the March quarter. The retail industry has felt the biggest impact, while both the arts & recreation and healthcare sectors bucking the trend with the strongest growth
- Little progress on late payments: Nationally, small firms are waiting an eye-watering average of 28.7 days to be paid, 0.3 days longer than the previous quarter.
UK small business hiring continued to show signs of recovery in the face of a challenging macroeconomic environment, with employment rising 1.4% year-on-year (y/y) in the first quarter of the year (January-March 2024).
Alex von Schirmeister, Managing Director, UK & Emerging Markets at Xero, said: “An appetite for hiring is a positive sign of growth amongst small businesses, but it doesn’t disguise the slow sales data we’ve seen over the last two quarters. There are some glimmers of stronger performance in Scotland and the North of England, but we need to see recovery across the UK.
“To accelerate this there are some preventable issues we can address immediately – small businesses must be paid on time. We’re still talking about late payments because our data shows it’s still getting worse. It’s crucial the government holds large firms accountable.”
You can read the full report here.
