• Two thirds of agriculture SMEs predict increased turnover growth, Paragon Bank research finds
• Turnover increases set to spark fresh investment in businesses
• Carried out by Opinium, the research finds majority of agriculture firms securing financing to invest in their operations

SMEs in the agriculture sector are set to overcome national economic challenges and are forecasting growth and fresh investment for 2023.

Paragon Bank research that two thirds of all SMEs in the sector are expecting turnover to increase in Q1 compared to the same period in 2022. A quarter (24%) expect it to rise by between 5% and 10%, and a further 7% forecasting turnover growth of over 10%.

Conducted by Opinium, the research found that while 2023 is set to exceed that of the 0.5% recorded in 2022 only 34% of agriculture SMEs are confident about their business in the year ahead.

While SMEs in the sector are expecting turnover to grow by an average of 3% in 2023, concerns remain over key operating factors.

• Payment terms of suppliers (Improved 39% / Worsened 18%)
• Cost of goods and services (39% / 42%)
• Availability of goods (38% / 31%)
• Suppliers meeting business needs (37% / 39%)

Economic challenges have though not stopped agriculture SMEs planning for the future with 71% seeking finance to invest in their operations in the year ahead, with planned spending on:

• Machinery: 22%
• Staff training: 22%
• IT technology: 15%
• Improvements to premises: 13%
• Purchasing additional premises: 12%
• Commercial vehicles: 11%
• Staff recruitment: 11%
• Research and development: 11%

Commenting on the research findings Ashley Butterfield, Paragon’s agriculture finance lead, said: “After a year of challenges it is greatly encouraging to see agriculture SMEs predicting a significant increase in turnover growth in 2023. Matched by planned investment in operations, our sector is taking positive steps forwards to ensure the year ahead will be start of period of growth and progress.”

He continued: “While it is clear challenges remain, with the cost and availability of equipment reducing sector confidence at the start of the year, it is important to remember that conditions will continue to improve, and new technology will help the sector further recover.

“Attending the recent LAMMA show, it was great to see both the new, more energy efficient equipment on display and the growing confidence of the attendees. As specialist agriculture lenders, we are ready to support the sector and play a role in the ongoing recovery – and we look forward to speaking with SMEs to develop bespoke financing packages to ensure that they have access to the latest technology.”

For further information contact:

Tom Frew
Media Relations Manger
Paragon
E: [email protected]
www.paragonbank.co.uk 

Notes to editors:

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.