Some cautious
optimism
17 June 2020
The new NatWest UK Small Business PMI® survey shows signs of optimism as downturn in business activity eases, but small firms are especially cautious ® about outlook
NatWest UK Small Business PMI
T
Slide in business activity eases, but small firms are especially cautious about the outlook he new NatWest UK Small Business PMI® survey has identified a clear improvement in the business environment since April, with the downturn in private sector output moderating from the record drop at the peak of the coronavirus disease (COVID-19) outbreak.
UK Small Business Activity Index
May ‘20
26.3 Apr: 14.6
Dec ‘19 - May ‘20 60 50 40 30 20 10 UK overall
28
However, small businesses are more cautious about the year ahead outlook than their peers in all three main sectors covered by the new survey, prompting NatWest to unveil a Small Business Taskforce to support its customers through the next phase of recovery.
Key findings
Key Findings
• New survey on small businesses shows signs of optimism with slower downturn in business activity during May • Widespread use of furlough scheme for small firms helps retain staff
Signs of a turnaround were highlighted • Small firm’s expectations lag by a rise in the supporting Small Busibehind those reported by larger ness Activity – which monitors Signs ofIndex a turnaround as downturn in activity slows during May firms output at private sector companies with 1-49 employees in the services, • NatWest unveils Small Business Widespread use of furlough scheme helps retain staff construction and manufacturing secTaskforce to respond to findings tors – from 14.6 in April to 26.3 in May. and support customers with next phase of recovery Business expectations lag behind those reported by larger firms Nonetheless, the index remained below the 50.0 no-change value and ® Employment among small signalled the second-fastest in Business This new NatWest UK drop Small PMI trends is a monthly index designe businesses have been moremanufacturing, resilient business activity since the start of and challenges faced bythesmall enterprises in the s than elsewhere in from each of main health em series in 1998. Small manufacturers sectors as the UK economy begins to emerge thethepublic categories of activity monitored by recorded the slowest drop in output, ® May data from the NatWest Small Business PMI point to a clear imp survey. However, survey responfollowed by service providers, whileUKthe seen during April, sector with the in privatea sector dents experiencing slump inoutput reve- moderat those in the construction post-downturn nues overwhelmingly commented onoutbreak. edreported the fastest pace of decline. at the peak of the coronavirus disease (COVID-19) use of the government’s job retention Small businesses continued to exSigns of a turnaround were highlighted by a rise in the All-Sector Smal scheme to help keep on staff. perience a severe shortfall of new which monitors output at private sector companies with 1-49 employe work in May and reported widespread 26.3 inclosures May. Nonetheless, the index remained below the 50.0 no-chang Downturn in service sector business across their supply second-fastest drop in business activity since the start of the series in 1 business activity eases from chains, despite a boost as some parts April'sfollowed record by service providers, while of recorded the UK economy began todrop reopen the slowest in output, with social posted distancing measures. sector the fastest pace of decline. May data highlighted that small serSmall businesses continued tovice experience a severe shortfall of new w sector companies remained unDifficulties sourcing materials, rewidespread closures across supply a bo der severetheir strain, despitechains, a boost despite in stricted transport business capacity and the UK economy began to reopen with social distancing measures. Diffic some areas as parts of the economy need to find alternative suppliers all restricted transport capacity thetoneed towith findsocial alternative began reopen distanc- suppliers placed a particularly strong burden on and measures.in Atthe 25.9, the Business small costs in May, especialon business small business costs in May,ing especially manufacturing and co Activity Index was well below the 50.0 ly in the manufacturing and construcEmployment trends among small businesses have been more resilien no-change mark and the second lowtion sectors.
of the main categories of activity monitored by the survey. Howe experiencing a slump in revenues overwhelmingly commented on use retention scheme to help keep on staff. Small businesses are much mor ahead outlook than their peers in all three main sectors covered by the
SURREY BUSINESS MAGAZINE
A dynamic small business sector is undoubtedly a pre-requisite for gr and the latest PMI results illustrate the urgent need to help these firms a
