While the UK Government continues to promote new trade agreements with the USA, India and the European Union (EU), the latest research from
Novuna Business Finance suggests that small businesses across the UK are increasingly turning inward. According to a nationally representative survey of 1,000 UK SMEs, 84% now see the domestic market as their primary route to growth — up from 64% in 2017 and the highest level recorded in eight years.
The shift is most pronounced in sectors such as agriculture, construction and hospitality, where reliance on UK-based trade is near universal. In agriculture, 97% of businesses are focused on domestic opportunities, followed by 96% in construction and 87% in hospitality. These figures reflect a broader trend of caution among SMEs, many of which are choosing to consolidate operations closer to home amid ongoing political and economic uncertainty.
Furthermore, interest in overseas markets has declined across the board. The USA, once a stable target for expansion, has seen SME interest fall to just 12% — its lowest point since 2017 and a significant drop from the 22% peak recorded in early 2020. The European Union (EU), historically a key growth region for UK businesses, has also seen a decline, with only 17% of SMEs now looking to expand into EU markets. Manufacturing businesses remain the exception, with 24% still seeking EU trade opportunities.
Elsewhere in Europe, interest in non-EU countries has halved over the past eight years, falling from 12% to just 6%. No overseas market has seen an increase in SME interest during this period, underscoring the extent of the domestic pivot.
Regionally, the trend is strongest in Yorkshire and Humberside, the West Midlands and the North East, where over 85% of businesses are focused on UK growth. London stands apart, with only 77% of SMEs prioritising the domestic market. Capital-based firms are also the most likely to pursue opportunities in the USA (31%) and the European Union (25%).
Scotland presents a curious case. Despite strong pro-European sentiment in public discourse, 85% of Scottish SMEs are focused on UK growth, and only 15% are looking to expand into the EU — below the national average.
Jo Morris, head of insight at Novuna Business Finance, said the findings reflect the frustrations many SMEs have experienced since the Brexit referendum. “Back in 2017, nearly a third of small business owners told us they wanted the Government to reverse Brexit. Fast forward to 2025, and our Business Barometer shows that 77% of SMEs are concerned about the impact of US policy on UK businesses. These concerns are now playing out in strategy, with more firms looking inward for growth.”
With the Autumn Budget set for November, many SMEs will be hoping for measures that support domestic trade and provide stability. Despite Government optimism around international trade deals, the data suggests that confidence among small businesses remains firmly rooted closer to home.