Small and medium sized businesses in the UK have identified continuing eurozone woes and government spending cuts as the main factors impacting upon their business optimism, according to an AXA Commercial Lines study.

The survey gauged the perception and business outlook of 500 SME leaders in the UK and identified what concerned them most.

Almost half of respondents (49%) state that the economic situation in the eurozone and government spending cuts (46%) are the top factors affecting optimism about the future, and the effect on their businesses. As a result, nearly two-thirds (65%) are not expecting their business to grow over the next six months, and the same amount (64%) predict they will make the same or less profit this year compared to last year.

Just nine per cent are planning to recruit additional staff by the end of the year, and consequently, four in ten SME leaders will not take any sort of holiday this summer, and will continue working right through. Despite the ‘feel good’ factors of the Olympics and Euro 2012 Championships, eight in ten (79%) and nine in ten (88%) believe they will have no effect on business performance at all.

Commenting on the findings, Matthew Reed, managing director, Intermediary for AXA Commercial Lines said: “The research reveals a disheartening attitude by SMEs to business performance for the rest of the year. However, the findings help AXA and its intermediary partners gain a greater understanding of the pressures facing SMEs and how we can both work together to help these businesses manage the risks. It’s an opportunity for brokers to talk to SMEs, discuss all options they could consider and even help them look for opportunities for growth.”

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