Small business confidence at four-year high, study finds

Small businesses in the UK are some of the most confident in Europe, according to a study published today which showed confidence at a four-year high.

The Sage Business Index, a study of 13,170 small and medium-sized firms conducted by accounting software company Sage, found that two-thirds of respondents (66.29%) were “optimistic” about the prospects for their own businesses, a 3.74% rise on last year and a figure that represents a four-year high.

This put the UK ahead of European competitors including France and Germany in terms of business confidence, and beat the global confidence average by two points.

In line with this increased confidence, UK businesses were bullish about prospects for the year ahead, with 63% predicting an average of 3.5% growth over the next 12 months. This finding coincides with a study by Barclays, also published today, which found that three in five businesses experienced a growth in turnover in the past year.

Despite this increasing confidence, the UK still ranked as one of the most risk-averse countries in Europe, with 44% of business decision makers describing themselves as risk takers  – significantly lower than the US (54%) and Brazil (61%).

Sage’s study found exporters in particularly confident mood, following a year in which 39% of exporting businesses saw an increase in exports and just 10% experienced a decrease. Half of exporters predicted a further increase in turnover next year of 3.4% on average.

Despite this, few UK businesses felt they received enough help with exports from the UK government, with just 8% satisfied with the level of support and 28% saying the government should offer greater financial incentives to sell abroad.

Brendan Flattery, chief executive of Sage UK & Ireland, said: “With the UK economy continuing to go from strength to strength,  businesses have been in a buoyant mood in the last 12 months.

“Nearly two thirds of businesses in the UK expect to see their business grow in the next year. That shows they’re feeling very self-assured, as the UK economy charges ahead of the rest of Europe.

“It is fair to say we are in a golden age for entrepreneurs.  The research suggests most businesses in the UK, regardless of size,  have growth firmly on their agenda. But, as only 8% of UK firms say they receive the support they need to help grow their exports, it’s vitally important that support is there for the UK economy to continue to grow.”