The rate of growth from the city’s SME sector is joint highest in the country along with the Greater Manchester region with the predicted rise in the city’s contribution set at 26 per cent by authors Hampshire Trust Bank.
The annual research, conducted in partnership with the Centre for Economics and Business Research (CEBR), reveals national SME contributions to the economy will grow by 19 per cent from 2016 to 2025.
UK SMEs currently contribute £202bn to the economy. Top 10 UK cities by SME contribution to the UK economy.
Sheffield’s contribution is also expected to soar by 14 per cent from £3.5bn to £3.9bn.
The Hampshire Trust Bank study published last year had previously forecast SMEs to add £217bn to the UK economy by 2020.
However analysis of the latest economic data now predicts these companies will add £219bn.
Looking ahead to the years 2020 – 2025, six of the top 10 cities are forecast to grow their economic contributions by 10 per cent or more within this five year period with London, Glasgow and Birmingham also included in the list.
However the economists who produced the list said the picture was not entirely good news.
In light of the ongoing economic uncertainty caused by Brexit, the study also reveals more than a third of SMEs felt their business growth expectations had decreased following the decision to leave the EU.
This is particularly being felt in London which indicates to why the capital is not predicted to grow as quickly as other regions of the UK.
Mark Sismey-Durrant, Chief Executive at Hampshire Trust Bank, said: “SMEs are forecast to grow their economic contribution significantly over the longer-term, which serves as a critical reminder of the important role these businesses play in ensuring the success of the UK.
“We also should note from our study the lowering in confidence amongst some SMEs.
“If the UK is to be prosperous as we move away from the European Union, we need the government to keep the spotlight on smaller companies by creating conditions which will support their continued growth, as our research demonstrates how much we need these companies to develop and achieve their ambitions.”
Nina Skero, Managing Economist at CEBR, said: “This study demonstrates how SMEs are making a vital contribution to city economies across the UK. The importance of SMEs is on the rise, therefore we hope this research will boost confidence among business leaders in the UK so they may continue to support job creation and capitalise on opportunities for growth.”
The report comes less than a month after Yorkshire was named as the only region in the country to see a decline in the health of its SME sector.
While the news that Yorkshire was the only region to register a decline, Oliver Kolodseike, a senior economist with Cebr and one of the report’s authors, said that performance had to be taken into context against what had been a very good first quarter for the region and there was no cause for alarm from the figures.