Small business confidence
Research published this week by the Federation of Small Businesses (FSB), shows that confidence levels amongst small businesses in the West Midlands fell sharply in the second quarter of this year. The decline reflects the downbeat economic conditions small businesses had to navigate over the quarter, due to the rising cost of doing business, stickier-than-expected inflation, plus two base rate hikes adding pressure debt repayments.
Key findings of the FSB Q2 Small Business Index for the West Midlands include:
More small businesses reported a drop in their revenues (37 per cent) than reported an increase (32 per cent);
More expect to decrease their investment in the business (28 per cent) than expect to increase it (15 per cent); and
The greatest barriers to growth are perceived to be the general economic conditions in the UK (64 per cent), weak consumer demand (31 per cent) and increasing labour costs (27 per cent.
However, there are more positive findings in relation to staffing levels, with 75 per cent of respondents saying that staffing levels had remained stable and unchanged since the first quarter of the year and almost half (48 per cent) aspire to grow their business either rapidly or moderately in the next 12 months.
Rob Harrison, the FSB’s West Midlands Policy Representative and Director of local communications agency Glued, commented:
“After an encouraging uplift in confidence during the first Quarter of 2023, it’s disappointing, if not unsurprising, to see that confidence has ebbed away during the following, second quarter. In reflecting upon these findings, it’s important to remind policymakers that small businesses make up more than 99 per cent of the UK’s business stock. To support them in their endeavours, we need to see positive action from government on issues such as business rates reform, VAT thresholds and tapering, late payment, access to finance and support programmes.
Small business owners are not looking for special treatment. They simply require the conditions for growth - so that they can continue to provide more of the products, services, jobs and investment that are so urgently needed by all of us at the local, regional and national levels”.
