Small businesses are struggling because of a lack of quality public infrastructure and access to skilled labour, according to a new report.
The British Chambers of Commerce (BCC) and small business platform Xero carried out the survey with more than 900 small to medium-sized enterprises (SMEs).
It showed such factors are also entrenching a rural-urban divide among UK SMEs.
Only 53 per cent of those surveyed expect to see turnover growth in the next 12 months, while one in four (27 per cent) expect turnover to shrink over the same period.
The rural-urban divide was particularly notable in public transport with 58 per cent of SMEs in rural areas stating they do not think their area has reliable and well-connected trains. This compares to just 39 per cent in urban areas.
This level of dissatisfaction is greater in the North of England (52 per cent) and the Midlands (51 per cent) than in the South (36 per cent).
Just over half of SMEs (51 per cent) in business, retail or industrial parks said they were not satisfied with public transport provision. This rose to 79 per cent in rural or countryside areas, compared with 42 per cent in towns, villages and high streets.
Almost two in three SMEs (63 per cent) do not believe their local area has high availability of appropriately skilled labour.
However, the survey shows this is more of a struggle for firms in business, industrial or retail parks with 72 per cent stating they struggle with a labour shortage. The figure is 56 per cent for firms based in urban areas.
When it comes to internet connectivity, 75 per cent of SMEs overall agree their area has reliable broadband – only 56 per cent in rural areas but 82 per cent in urban areas.
Alex Veitch, Director of Policy and Public Affairs at the BCC, said: “Our research highlights the rural-urban divide that continues to exist between firms across the UK, with rural businesses generally reporting higher levels of dissatisfaction with the quality and availability of local resources.
“High-quality public infrastructure and access to a skilled labour force are both key to the success of a business, in particular SMEs, and today’s findings indicate that rural businesses are at a significant disadvantage.
“Government must urgently prioritise the development of public infrastructure. Such investment will not only enable local and small businesses to adapt and thrive, it will also create jobs and inject money into local economies across the UK.”
