MORE than half of small to medium enterprises expect their turnover to increase this year despite the current challenges, research suggests.

The Azets SME Barometer, compiled by accountancy firm Azets, surveyed 1,100 clients and found 62 per cent expected their turnover to rise in the next 12 months.

Adam Wilson, regional managing partner for Azets’ Solent offices in Dorset and Hampshire, said: “Despite gloomy economic headlines, many firms appear to be relatively bullish about future prospects.

“Like our preceding barometer, the findings once again demonstrate the strength and resilience of local businesses.”

Azets’ research found new business models, digitalisation and the economy represent the “biggest opportunities” for businesses.

Fifty-four per cent said they will increase digitalisation in the year ahead, with cyber-security, data analytics, remote working, e-commerce and process automation ranking as top priorities.

Cost inflation is the largest day-to-day worry, along with recruitment. Two-thirds were finding hiring the right people with the right skills challenging.

The research also found nearly three-quarters are not focused on reducing carbon footprints.

Just under half of respondents said they do not have the competencies to address ESG – environmental, social and governance – to  safeguard their businesses from future risks. 

Covid-19 remains a major threat, from staffing to supply chain issues, and 16 per cent of SMEs in the UK have experienced a cyber-attack or serious data breach. 

The findings were collated before the Russian invasion of Ukraine. 

Mr Wilson said: “Despite the understandable negative sentiment and economic optimism dropping from our previous and first barometer, it is clear from our latest barometer that 62 per cent expect their turnover to increase, with 53 per cent forecasting improved profits.

“Marked by another year of the pandemic and its associated effects, and the harrowing Ukraine crisis, business leaders continue to remain stoic, pivoting their business models and proving why they continue to be the backbone of our economies.”

Azets is the UK’s largest regional accountancy and specialist business advisor to SMEs. It has offices in Chandlers Ford, Winchester and Romsey.