Written by: Keith Tully
Date: Wednesday 20th September, 2017
Confidence among the UK’s small businesses has slumped to the lowest levels recorded since the immediate aftermath of the 2016 Brexit referendum.
According to the Federation of Small Businesses (FSB) and its Small Business Index (SBI) optimism among small firms nationwide plummeted from a figure of +15 in the second quarter of this year to +1 for the third quarter
Meanwhile, as many as one in eight small businesses now expect to downsize, move on or close down their operations altogether, which at 13 per cent is the highest proportion ever recorded by the FSB’s index.
One obvious reason for the downturn in small business optimism is rising costs, which 70 per cent of companies have reported experiencing on a comparative basis between 2016 and 2017.
Many small businesses are also worried about how problems with the UK’s domestic economy and a wilting of consumer demand will impact their operations and their profit-making capabilities in the months to come.
Retailers and businesses involved in entertainment industries were found by the FSB’s SBI to be among the small firms with the lowest levels of optimism during the third quarter of this year.
“Rising inflationary pressure and a weakening domestic economy are the twin drivers of plummeting confidence among small firms and consumers alike,” said Mike Cherry, the FSB’s national chairman.
“With conference season and the Autumn Budget approaching, policymakers have an opportunity to restore optimism.”
While positivity is apparently in short supply among most small businesses, those whose focus is primarily on exporting goods were among those most likely to be optimistic about their prospects, according to the latest figures on the subject.
Around 35 per cent of small businesses involved in exports expect that their export sales will increase in the final quarter of 2017 and a three-year high of 39 per cent recently reported an increase in the scale of their overseas sales.
“It’s encouraging to see that small firms which export are still bullish about the future,” said Cherry from the FSB. “While growthfalters here in the UK, it’s accelerating across the Eurozone and US.”
23rd October 2017 The British Chambers of Commerce (BCC) has called on the government to freeze business rates in order to provide a boost to the competitiveness and productivity of UK companies.
12th October 2017 The impact of Brexit and the process of Britain departing from the European Union is likely to push up rates of insolvency among businesses throughout the UK.
11th October 2017 Financial losses and persistent problems with cash flows has led the civil engineering business Owen Pugh to enter administration.
2nd October 2017 Monarch Airlines has become insolvent and ceased trading as a result of “mounting cost pressures and increasingly competitive market conditions,” administrators have confirmed.
29th September 2017 The Bank of England governor Mark Carney has given a clear indication that he expects the base rate of interest in the UK to rise in the near future.
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