UK SMEs are least likely to invest in their businesses during the remainder of 2019 according to the latest Global Business Monitor from Bibby Financial Services (BFS) and trade credit insurer, Euler Hermes.

The report looks into the opportunities and threats faced by SMEs worldwide, based on a survey of businesses across 13 regions, with the ongoing trade war between the US and China, and Brexit featuring as the top two concerns over global economic growth.

While UK SMEs remain firmly focused on Brexit and the country’s future trading relationship with the EU, across the Channel, SMEs in Europe’s largest economy are concerned with more immediate threats. As the trade war between China and the U.S. continues, the optimism of Germany’s SMEs has slumped, with 51% believing the trade dispute is the greatest threat to the global economy today.

Meanwhile in Ireland, the UK’s closest trading neighbour, 72% believe that Brexit is the greatest threat amid continuing discussions over the Irish border. Almost two fifths of Irish SMEs said they are now considering export markets beyond the UK in the wake of Brexit.

SMEs in the US were most likely to invest in their businesses over the coming months with sales and marketing, and staff training the top key areas of capital expenditure.

David Postings, global chief executive, Bibby Financial Services, said: “It’s evident that UK SMEs are anxious about investing over the coming months as a no-deal Brexit becomes a possibility.

“This is damaging to the economy at a pivotal time for the country. The UK is a highly sentiment-based economy, and it’s confidence that fortifies supply-chains, generates business orders and creates jobs. UK and Irish businesses need certainty over tariffs and supplier relationships. Without this, capital investment will continue to be subdued, stifling output even further.

“Further afield, businesses are facing similar challenges as the ongoing trade war between the U.S, and China continues to impact global growth. It’s an uncertain time for many businesses across the world. Based on the early warning signs, it’s likely that we’ll see slowing global growth in 2020 and maybe a recession in the UK.”

Ludovic Subran, global chief economist, Euler Hermes, added: “No matter what the political outcome of the Brexit negotiation is, the scarring effect on SMEs is visible. We expect a technical recession at the turn of the year because of excessive contingency stockpiling which will trigger a fall in production in the next six months.

“Growth should remain weak, at 0.8% in 2020, which should feed into higher non-payment risk. Business insolvencies should increase by +5% in 2020, for the third consecutive year. Targeted measures to help British SME bridge the profitability gap may be needed.”