UK small businesses show resilience in Q1 2025, led by profit growth and regional gains
The Q1 2025 Small Business Tracker, produced by Sage UK in collaboration with Smart Data Foundry and the Centre for Economics and Business Research (CEBR), highlights a continued trend of resilience among the UK's small businesses. With profits, revenues, and productivity maintaining positive momentum, small enterprises are proving to be a steady force in the wider UK economy.
Key Takeaways from Q1 2025
Profitability surged: Small business profits grew by 8.3% year-on-year - the strongest growth seen in three years.
Revenue on the rise: Real revenues were up 2.9%, marking the fourth consecutive quarter of growth.
Productivity holding steady: Productivity increased by 0.3%, following a notable 3.6% jump in Q4 2024.
Expenditure down: Real expenditure dropped by 1.3%, suggesting businesses may be managing costs more efficiently.
These trends mirror the broader UK economic performance, which grew by 1.3% year-on-year in Q1. Encouragingly, every UK region recorded profit growth.
Regional Highlights:
The East of England led the pack with an impressive 16.3% annual profit growth.
Scotland followed closely with 13.6%, significantly outpacing the UK average.
Urban centres like Edinburgh, Motherwell, and Inverness have emerged as some of the fastest-growing areas over the last two years.
As these numbers show, small businesses are not just surviving - many are adapting and thriving. To explore the full insights and analysis, you can read the full report here..
