Small business confidence in decline

The last six months has seen a marked decrease in the confidence of small and medium-sized enterprises,  findings from Aon’s Small Business Change Index suggest.

The report found that small business owners are less confident when it comes to future growth (48% as opposed to 58% six months ago) while the number of business owners “predicting a difficult period” has risen from 9% to 11%.

Larger start-ups and small businesses were found to be significantly more confident than smaller counterparts; 65% compared to just 38%, although they were more likely to be predicting modest growth for the same period.

Small businesses based in the South West, Wales and Scotland were the least optimistic about future growth while small firms in the North West, South East and London  had the most confident outlook.

When it comes to sectors, small business in IT are the most confident -up from 42% to 45% – while confidence among small business retailers has dropped 6%.

On the findings, Chris Lee-Smith, managing director of Aon Risk Solutions Affinity, commented:

“When we commissioned this research last spring ahead of the general election, almost one in four UK businesses identified political uncertainty as a very real risk to overcome in the next 12 months. Six months on, it is a surprise to see that small business leader confidence is at best static, with some significant swings of opinion prevalent in a number of key industry sectors.

“Businesses that embrace change and are looking to open new markets are most likely to be very confident, whereas confidence is notably more muted among those businesses that are placing most emphasis on maintaining their current position.”