Small business confidence has dropped to lowest levels since 2013
Osborne's new budget measures will need to boost confidence as FSB survey reveals optimism has plummeted, particularly in Scotland and Northern Ireland
A new survey from the Federation of Small Businesses (FSB) reports that UK small business confidence for this first quarter of 2016 has fallen to the lowest levels recorded since 2013.
The research, the findings of which predate the chancellor’s “budget to back businesses”, has found that small firms in Scotland and Northern Ireland are the least confident about their future prospects while the survey also highlighted a marked drop in optimism among small companies in London and the East of England.
The FSB has suggested that this recent “cooling in confidence” is a result of a number of factors such as uncertainty about the strength of the UK and global economy amidst the ongoing Brexit debates, and new policies facing small businesses such as changes to the National Living Wage (NLW) and auto-enrolment.
Alongside a decline in business sentiment, the survey also indicated that small businesses financial performance, productivity and hiring intentions are falling year-on-year and has hit exports hardest with the value of exported goods having declined since 2012.
However, more positively, the research suggested that small businesses are now finding it easier to access finance with a “record” percentage of small companies succesfully accessing credit in the past quarter.
What’s more, small firms are increasingly moving towards alternative finance. 9% of small businesses who applied for credit between January and March this year, did so via peer-to-peer (P2P) lending or crowdfunding – a rise of 3% on the October to December 2015.
FSB vice chairman, Sandra Dexter, said of the findings: “Small business confidence has clearly faltered, which is why the welcome small business focus in the budget is so important.
“We need a renewed push for growth and productivity – with policy makers delivering a sustained package of support for ambitious small firms.
“The ongoing improvements to small business finance demonstrates how a sustained and focused approach to supporting smaller firms can really pay off.