UK SMEs defy economic headwinds to deliver strong growth

Despite persistent economic headwinds, the UK’s small and medium-sized enterprises (SMEs) are showing remarkable resilience, with the majority reporting growth over the last 12 months.

New research from specialist SME lender Shawbrook reveals that 71% of SMEs have grown in the last year, with 21% reporting significant growth. This compares to only 46% of SMEs reporting growth in 2024, and only 13% reporting significant growth.

The data highlights a particularly strong performance among larger SMEs (100-249 employees), with 76% reporting growth over the last year, compared with 49% in 2024.

Key drivers behind this positive momentum include strong customer demand (32%), team expansion (29%), and investment in staff (27%). These factors point to a proactive SME landscape, where businesses are focused on building operational strength and customer relationships despite external pressures

These findings also suggest that as the job market opens up, small businesses will prove valuable contributors for investing in skills and people. This trend looks to continue as SMEs plan to make strategic investments to support continued growth. Almost half (48%) plan to upskill staff, while 25% will hire new employees, and 22% are planning premises upgrades- indicating a clear intent to build capacity and sustain momentum.

“It’s great to see so many businesses not just holding steady in tough conditions but actually growing and investing in their future,” commented Neil Rudge, Chief Banking Officer, Commercial at Shawbrook.

“Politicians love to talk about growth – but it’s Britain’s SMEs that actually deliver it. They don’t need more speeches, they need real backing: fair tax, smart policy and access to funding that helps them build, hire and grow.

“These findings are a good reminder that, even with wider pressures like the risk of a trade war and rising costs from things like minimum wage and National Insurance hikes, UK SMEs are still proving themselves to be dynamic, resilient and a vital part of the economy. While big business grabs headlines, it’s SMEs that keep the UK running – creating jobs, paying taxes and driving local economies,” he added.