Welsh business owners have the highest levels of mental health issues compared to the rest of the UK.
This is the finding in a monthly SME Recovery Tracker from the Association of Chartered Certified Accountants (ACCA) and The Corporate Finance Network (CFN).
The survey, which polled accountants representing more than 17,600 businesses, found that economic, operational and financial pressures are taking their toll on the wellbeing and mental health of Welsh SMEs.
It found that 45% of Welsh business owners feel more stressed and anxious than usual - a 37 percentage point increase from pre-Christmas level and 10% higher than the rest of the UK (35%).
In addition, 28% of Welsh business owners have difficulty sleeping and 24% saying they have worsened mental health.
Not only affecting mental health, mounting financial pressures including surging inflation, interest rate rises, the energy crisis and the increase in National Insurance contributions are also severely impacting Welsh businesses’ ability to survive or grow.
The survey paints a particularly bleak picture about the current strains on Welsh businesses who are feeling the squeeze of the pandemic the most compared to the rest of the UK.
More than 2 in 5 Welsh SMEs say they will struggle to meet rising payroll costs in April due to the incoming health and social care levy increase in NICs, as well as rising minimum wage rates. This is 14% higher than the UK national average of 26%.
Almost half are expecting to run out of cash in the next year at 47%, more than double the UK national average of 1 in 5 (21%) UK small businesses.
Despite increasing pressures, over a third (34%) of Welsh small business owners are hopeful about growth ambitions in the next six months.
Although the findings demonstrate an appetite for growth, a concerning 81% of Welsh SMEs are unaware of the finance options available to them - 13 percentage points higher than the national average.
Lloyd Powell, head of ACCA Cymru Wales, said: “Our latest research reveals alarming results about the current pressures on Welsh SMEs and the impact those pressures are having on their wellbeing. With 2 in 5 (40%) Welsh SMEs anticipated to struggle to meet payroll costs in April, the UK government needs to seriously consider the knock-on effect of policy decisions, and also what further support the Welsh Government can provide.”
He added: “Ultimately, these figures indicate that many Welsh businesses are at risk of failing this year due to the impact of rising costs including the impending increases in National Insurance Contributions (NICs) and minimum wage rates.”
Kirsty McGregor, founder of The Corporate Finance Network, said: “All indicators across this Tracker are alarming. As our research suggests, the hike in National Insurance rates will leave already demoralised small business owners and sole traders in an extremely testing position. UK SMEs have already endured prolonged financial strain with 6% of UK SMEs expressing they are unable to cope.”
She added: “While SMEs remain hopeful and the findings demonstrate an appetite for future growth, the onus rests on the government to support SMEs, to provide them with the resources that they need, instead of placing more hurdles for them to overcome.”
Claire Bennison, head of ACCA UK, said: “Our research reveals a very uncertain start to the new year for SMEs, countered with optimism about the long term for 2022. However, this essential progress can’t be achieved without the cash flow and people to help them grow, or indeed the resilience to do this too.”
Ms Bennison added: “With more than 1 in 4 UK SMEs anticipated to struggle to meet payroll in April, the government needs to seriously consider the economic implications of the planned hike in National Insurance rates and the impact it will have on UK SMEs who serve as a backbone to the UK economy. Ultimately, these figures point to the danger of businesses failing.”
