The rise in energy bills have forced SMEs to make substantial changes to their operations, according to new research. Conducted for Paragon Bank by Opinium, the survey of over 500 UK SMEs found that 67% of firms had seen their energy bills increase by over 20% over the last twelve months – with nearly half (48%) of firms recording an increase of over 30%.
The rise in energy prices has seen SMEs bring in a series of changes to their working practices, including:
- Increasing the price of goods and services (58%)
- Cutting current or planned spending (44%)
- Encouraging staff to work from home (38%)
- Taking out additional finance (33%)
- Cutting production output (33%)
- Transferring some element of production overseas (30%)
A further 9% of firms have seen their energy bills increase by less than 10%, with 18% reporting a 10-20% rise. Only 6% of firms have not seen their energy bills increase over the last twelve months.
Commenting on the findings John Phillipou, Paragon Bank’s Director of SME Lending, said: “After their vital role in keeping the UK economy moving throughout the pandemic, SMEs are now facing the challenge of increased energy prices. As our research demonstrates, the rise in energy costs is compelling SMEs to adopt new working practices to help them to adapt to the changing circumstances – but firms may also need to seek support to ensure they can continue to operate and help our economy recover.”
He continued: “Paragon was proud to support SMEs during the pandemic and we committed to continue supporting them through the current challenges. While the rise in the cost of energy may be temporary, our economy will always depend on a thriving SME sector – and we are ready to speak with businesses and discuss any further financial support they may require.”