QCA/YouGov Q2 2022 Small and Mid-Cap Sentiment Survey shows further dip in confidence
28 April 2022

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Companies’ confidence has continued to slip in the first half of 2022 with the general feeling from small and mid-cap company directors that the performance of the economy and their own business will not be as positive as they envisioned 6 months or 12 months ago. Generally companies are more positive than not regarding their own performance but the predicted performance for the wider economy has now drifted into negative territory. The survey was conducted in April 2022 so the impact of war in Ukraine and the inflation during the recent period are obvious reasons to have a more muted outlook than expected following the appearance that the impact of Covid-19 had been overcome at the same period last year. 

Other key confidence indicators have picked up on a dampening in sentiment recently. Deloitte’s recent survey reported waning confidence and the fund managers have an even more negative view with record levels (71%) of pessimism being recorded by Bank of America’s global Fund managers survey. 

The QCA’s sentiment survey also shows that, similar to the confidence outlook from small and mid-caps, they expect less employment growth than they reported in the last survey. 

A potential silver-lining is that company directors are expecting near record high turnover growth, at a similar level to when companies were expecting a “post covid boost” in H1 2021’s survey. However, this time around turnover growth may simply be down to inflationary pressures and companies passing higher prices on to customers. 

In terms of access to finance there remains a sizable minority of companies that envision seeking external finance within the next year, 43% but this is down from half in H2 2021.

Perhaps more positively, public equity has returned as the preferred and perceived easiest means of accessing external finance for public companies, after bank finance briefly overtook equity on both fronts towards the end of last year. 

View the report here.