Be the Business Productive Business Index – Edition Six, Q1 2023

Small and medium-sized businesses report significantly lower capabilities in areas linked to high productivity.

The Productive Business Index focuses on the productivity of micro, small- and medium-sized businesses in the UK. We track changes in the five key areas (management skills, training and HR, innovation, process efficiency and technology adoption) as well as general operating conditions, barriers to growth and expectations for the future.

The data we collect is analysed and combined to produce our index:

• Business performance measures trading conditions and company sentiment

• Business capabilities assesses activity in the five areas that drive productivity improvements

• In both performance and capabilities, we assess the current situation, as well as asking about future expectations and plans for improvements

• We then produce a business performance index and a business capabilities index

• These are combined to produce assessments of the overall current and expected situation

• Finally, these combine to form our overall Productive Business Index figure

Our latest edition findings include:

• A second consecutive fall in the headline Productive Business Index which is published twice annually

• The Index stands at 111.4, which is 1.2 points lower than the 5th edition published in October, and 10 points lower than Q1 2022

• This fall was driven by a significant drop in action taken by SME leaders to improve management skills, HR practices and operational efficiency, all of which have a proven link to higher levels of productivity

• Businesses that operate a hybrid model report higher performance and stronger capabilities than remote businesses and those operating from a dedicated work environment, like an office or factory

• Business leaders who regularly seek advice report significantly higher levels of business performance and activity to improve capabilities