• Two thirds of Transport SMEs predict turnover growth in Q1, Paragon Bank research finds
• Increased turnover and confidence to spark recruitment drive across sector
• Conducted by Opinium, research also identifies improvements to key operating factors

Transport SMEs are set for a confidence boost thanks to improvements to turnover, new Paragon Bank research has found.

Two thirds (66%) of transport SMEs expect turnover to increase during Q1, with 24% expecting it to rise by 5-10% and a further 7% planning on turnover to increase by over 10%.

Though more cautious about Q2 growth, 66% of firms also expect turnover to continue to rise but not by the same level – with 6% and 22% of transport SMEs predicting over 10% and 5-10% turnover rises respectively.

Carried out by Opinium, the research also found that after a 0.5% fall in 2022 transport SMEs are today predicting a 2.6% turnover increase in 2023.

Expected increases to turnover fed through into optimism throughout the sector with 55% of SMEs reporting confidence for their business in the year ahead and only 15% expressing doubts.

Improved turnover over and confidence is set to lead to an increase of full-time staff working in the sector, with 54% of firms planning on hiring more staff during 2023 and only 7% anticipating a reduction in staffing levels.

The research also identified greater confidence for the transport sector (57%) than the UK economy (33%).

While challenges remain, expectations for increased turnover and confidence in the transport sector follow improvements to key operating factors:

• Availability of goods (Improved 52% / Worsened 29%)
• Suppliers meeting business needs (49% / 31%)
• Costs of goods and services (39% / 30%)
• Payment terms from suppliers (33% / 16%)

While 2022 presented challenges to both the national and global economy, 55% of transport SMEs continued to secure finance to invest in their business:

• Staff recruitment: 27%
• Machinery investment: 27%
• IT technology: 19%
• Staff training: 19%
• Purchasing additional premises: 16%
• Commercial vehicles: 16%
• Improvements to premises: 14%
• Research and development: 11%

Commenting on the research findings Dale Trenam, Paragon’s Head of Transportation Finance, said: “This new research shines a light on what we have been seeing since the start of the year – that the transport sector is confident, busy, and looking to invest in the future. Last year was a tricky year for the transport sector; energy price rises and disruptions to supply chains created new challenges at a time when transport SMEs were working hard to put the difficulties of the pandemic behind them but, as the research demonstrates, improvements to range of key factors is boosting confidence and turnover is set to grow in the year ahead.

He continued: “The rising confidence of the transport SMEs needs to be supported with access to financing. At Paragon, we are ready to work with businesses looking to expand their fleets, invest in new assets, and plan for further growth.

“Each business is unique in terms of its operations and its requirements, and that means it will need bespoke financing solutions. Our specialist team not only understands this need but will also work with the business to find the right assets to fit their plans – and we can’t wait to partner with more businesses throughout 2023.”

For further information contact:

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

Notes for 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.