Small business confidence plummets to two-year low
Smallest companies found to be most concerned
Economic optimism has fallen markedly within Britain’s entrepreneurial community, with many company owners worried about the prospect of a new economic downturn.
That is the main conclusion of the latest Business Opinion Omnibus, conducted by BDRC Continental, based on responses from 451 business directors, each employing 250 employees or fewer. The ‘net balance of optimism’, calculated by subtracting the number of respondents expressing negative views from those with a positive outlook, showed a steep decline – from +4% in July to -12% in August. This balance, the lowest level for 29 months, is doubly troubling because it follows six months of relative optimism among employers. The fall in optimism was most pronounced among businesses employing 10 people or fewer; companies in this bracket recorded a net score of -16%. Companies employing between 11 and 50 people registered an overall score of +5% – although in fact this constituted a fall of 21 points. The mood of larger firms (with 50-250 employees) remained stable, coming out at an overall rating of zero. Discussing the survey’s results, Shiona Davies, director of financial and business-to-business research at BDRC Continental, admitted: “August has been a challenging month for the global economy, with the downgrading of US credit ratings, considerable concerns within the Euro, and … closer to home … rioting in Britain; all of which will have impacted small businesses’ sentiment. “This month’s Business Opinion Omnibus results have reflected the growing concern amongst small businesses and are a strong indication that businesses fear a double-dip recession.”