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Small business confidence at lowest level since 2009

Firms with fewer than 10 employees most pessimistic

Confidence among Britain’s small firms has dropped significantly, as business owners fear Britain may fall back into recession. That is the finding of the latest Business Opinion Omnibus, conducted by BDRC Continental, which surveyed 451 directors of businesses with up to 250 employees. The researchers calculated a net balance of optimism, by subtracting the percentage of respondents who stated that their business confidence was in decline from the percentage that stated that their optimism had increased in the last month. The result showed a significant drop, from +4% in July to -12% in August – the lowest economic optimism level recorded since March 2009. This comes after six months of relatively stable net optimism ratings. The decline in confidence was most marked amongst businesses with fewer than 10 employees, who recorded a net score of -16%. However those businesses with 11-50 employees had a positive result of +5%, despite recording the biggest change in August – a fall of 21 points. The net optimism of larger firms (with 50-250 employees) remained stable month-on-month, with a rating of zero. Shiona Davies, director of financial and business-to-business research at BDRC Continental, said: “August has been a challenging month for the global economy, with the downgrading of US credit ratings, considerable concerns within the Euro, and – closer to home – rioting in Britain, all of which will have impacted small businesses’ sentiment. “This month’s Business Opinion Omnibus results have reflected the growing concern amongst small businesses and are a strong indication that businesses fear a double-dip recession.”

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