The figures, published in the SME Health Check Index from Yorkshire Bank owners, CYBG, showed overall business confidence in the SME sector nationally to be at its highest level in six quarters, with small firms continuing to recruit staff.
The report, published in partnership with the Centre for Economics and Business Research (Cebr), examined the health of SMEs on a city basis for the first time.
It showed that London is falling back and there is more economic dynamism coming from the Midlands and the North – including Birmingham and Manchester as regional powerhouses. Cambridge comes out top in contrast to nearby Norwich, which sits near the bottom of the city league.
The North East cluster of Newcastle, Sunderland and Middlesbrough all recorded some of the lowest indicators amongst SMEs.
Gavin Opperman, inset, group business banking director at CYBG, said: “SMEs are showing resilience and resolve with strong employment growth, positive net business formation and increased borrowing, which is all good news for UK plc. However, decelerating GDP growth, partly driven by a slowdown in the global economy and increased household borrowing, feeds in to decreased confidence.
“This is the first time the SME Health Check Index has done a deep dive into SME activity in the UK cities.
“SMEs are the backbone of Britain’s economy and cities often act as significant drivers of regional economies. This new level of detail provides excellent insight into what’s really happening at a local level amongst the UK’s 5.6m SMEs.”