Small business confidence hits four-year high ahead of general election

Survey of 200 business leaders finds that 85% are planning to grow over the next 12 months though only 45%are positive about government policy

Following the announcement of Theresa May’s decision to hold a snap general election in June, the latest Enterprise Index from Smith & Williamson has found that small business confidence is at its highest level in four years.

The survey of over 200 business leaders found that positivity has risen by 30% since then end of 2016 to its highest level since mid-2013. 85% said they were planning to grow over the next year and 80% were optimistic about their prospects.

However, just 45% of those surveyed stated that they were positive about government policy – the fourth consecutive quarter of decline in the perception of government support for small businesses.

Additionally, with Brexit negotiations yet to commence and the UK’s departure from the EU continuing to be the hot ticket issue of the election, 54% of respondents said that uncertainty surrounding the triggering of Article 50 had negatively affected their business.

Guy Rigby, head of entrepreneurial services at Smith & Williamson, commented:

“There is no doubt that small businesses continue to have gripes about the government policy. However, the prime minister seems to have caught them in a buoyant mood.  It’s possible that, by triggering Article 50, entrepreneurs at least feel some progress is being made. In addition, the high profile climb-down on self-employed National Insurance Contributions (NICs) appears to be evidence of a government that is listening.

“The negotiation of a Brexit deal will have many layers, with the ramifications from any individual part having potentially widespread consequences. While the current mood is buoyant, small businesses need to be aware that changes to our relationship with the EU could affect them on a day-to-day basis. Recent growth decelerators, such as stagnating real wage growth and lower consumer spending, could be a portent of things to come.

“Confidence is important, but it is vital that small businesses keep a close eye on the changing landscape and guard against any irrational exuberance.”

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