CEBR findings highlight plummeting small biz confidence
Dozens of companies planning to lay off staff during rest of 2011
Confidence among Britain’s small businesses is continuing to plummet, with dozens planning to make redundancies over the remainder of 2011.
That is according to a new survey from the Centre for Economic and Business Research (CEBR), based on responses from 1,600 members of the Federation of Small Businesses (FSB).
A balance of 5.8% of respondents said they plan to reduce their company’s headcount between now and January, and many cited the twin threats of mounting costs and plummeting revenues as key concerns.
Nearly 80% of respondents said their costs have risen over the past 12 months, with one in three describing the increase as “significant”. Meanwhile revenues fell for the seventh successive quarter, and a balance of 7% of respondents said they expected a further reduction in the last three months of this year.
Charles Davis, economist at CEBR, said: “Companies relying on discretionary expenditure are especially negative, with the leisure, sports and entertainment and hospitality sectors showing the largest drops in confidence of any.”
John Walker, national chairman of the FSB, added: “As businesses come to terms with the double whammy of falling revenues and rising costs, it is no wonder that they’re losing confidence, and unfortunately, as their overheads increase, one way to control it is to lay off staff,”
Walker also suggested the chancellor should implement a series of tax measures, including national insurance holidays and cuts in VAT.