Recovery prospects in the Midlands for this year were given a boost after a study of SMEs found that almost half expect growth in 2013.

With SMEs and entrepreneurs seen by many as key to the UK’s economic revival, research from The Co-operative Bank has revealed that 46 per cent in the Midlands believe their sales and orders will rise this year.

The findings also revealed that around a third (31 per cent) of senior decision makers expect to invest in their company through, for example, new equipment or premises’ improvements.

And there was further good news for the economy in the Midlands with more than a quarter (27 per cent) saying they anticipate growth in international orders. One in seven (14 per cent) said they plan to expand their workforce through new recruitment drives in the new year.

Keith Alderson, managing director of corporate and business banking at The Co-operative Bank, said: “SMEs and entrepreneurs are widely acknowledged as vital to the economic recovery so these results are good news as we head in to 2013.

“As the curtain closes on another tough year it seems many SMEs in the Midlands are now looking forward with a cautious sense of optimism about the challenges for their businesses this year.

“We see this entrepreneurial spirit day-in, day-out in our dealings with customers and I’m not surprised that SMEs are adapting and exploring new markets to overcome the economic challenges.”

Asked about the challenges facing their business in 2013, more than one in five (21 per cent) surprisingly said they did not view the current economic climate as one of their main concerns.

While uncertainty in the economy was by far and away the biggest challenge with 79 per cent, cashflow was regarded as the next main issue for almost half (48 per cent) of SMEs, followed by support from banks (28 per cent) and the impact of rising energy costs (27 per cent). Red tape/regulation came next with 24 per cent.

The study also found that 18 per cent of business felt sales and orders would fall in 2013 although more than a third (38 per cent) said they had suffered a decline in 2012. Some 22 per cent also experienced a decline in international orders last year, but just one in ten (11 per cent) felt that this would be the case in 2013.

The study was carried out on the Bank’s behalf by YouGov.