Companies in the West Midlands are reluctant to invest in growth despite many being confident about the future.

Research carried out by Baker Tilly has revealed that 38 per cent of SMEs in Birmingham are confident about growth opportunities for their businesses over the next 12 months, yet are reluctant to invest. Just 44 per cent expected to increase turnover by five per cent or more in the next 12 months, however 88 per cent were not prepared to take on more debt to expand.

The findings were revealed in the Baker Tilly Your Business Outlook 2014 which surveyed 750 SMEs across the UK about their expectations, opinions and priorities for the coming year.

But despite the feeling of optimism for growth, the survey revealed that many remained cautious about investing in resources. Only 12 per cent of businesses in Birmingham said they planned to take on new staff within the next 12 months, and this was lower than the national figure of 18 per cent.

Only 15 per cent of businesses in the region said they planned to increase their capital expenditure, with the same percentage planning to increase their sales and marketing spend over the next 12 months.

Simon Hart, regional managing partner, said: “Although there appears to be real optimism from SMEs in the West Midlands around their prospects for growth, it’s difficult to see where this will come from. My real concern is that if SMEs delay opportunities for growth, then recovery in the West Midlands will remain hesitant.”

This article also appears in the Birmingham Post Business Daily digital newspaper. Find out more here