Britain’s SMEs have seen profits and sales rise at their fastest pace for two years, a new survey by software group The Sage Group PLC (LSE:SGE) has found.
Average profits rose by 9.5% year on year between April and June, the best for any quarter since June 2022.
Revenues meanwhile rose by 4.4% year on year, also the fastest since the first quarter of 2022.
Sage also noted that overheads have fallen for two quarters in a row due largely to lower fuel costs.
Derk Bleeker, chief commercial officer at Sage, said: “This quarter’s tracker showcases the robust financial performance of small businesses in the UK.
“It’s clear that small businesses are not only adapting but thriving.
“These achievements highlight their ability to innovate, manage costs effectively and drive economic recovery, solidifying their crucial role in the broader UK economy.”
The payroll data, taken from more than 153,000 UK businesses that use Sage’s software, indicated the growth came across all regions of the UK.
West Midlands was strongest a 15.1% increase, with Scotland, the North West, Yorkshire and the Humber also above 10%.
Laggards were the South West, South East and London recorded below-average growth, with the East Midlands recording the the slowest annual growth at 4.9%.
The report said the disparity was “largely driven by sector specialisms, with the West Midlands and North West excelling in heavy industry”.
One area of concern noted by Sage was that productivity dropped by 1.8% year on year but the report said this reflects a rise in average employee numbers to 5.6 from 4.3 in 2019.