FSB has published its latest Small Business Index which suggests confidence among small firms is rebounding throughout the UK.
In light of lower inflation, progress on talks regarding the UK’s future relationship with the European Union (EU) and an encouraging Spring Statement, the FSB (Federation of Small Businesses) has confirmed that small business confidence within its Small Business Index (SBI) is back in the black.
The quarterly SBI now stands at +6 after Q1 2018, up from -2.5 in Q4 2017. Last year, the FSB’s index fell in each quarter, falling into negative territory for only the second time in the last five years.
Over two-thirds (67%) of small businesses reported in the latest SBI that revenues are either stable or increasing. Almost three-quarters (72%) of small firms anticipate their performance to either improve or remain the same during Q2 2018, with only 27% lacking confidence about the next three months.
However, the SBI does demonstrate quite a disparity in confidence between the UK’s business sectors. Businesses in accommodation and food services and retail reported negative readings of -25 and -19 respectively. At the other end of spectrum, manufacturers were the most confident sector, reporting a positive reading of +33.
Mike Cherry, National Chairman, FSB, said of the SBI: “After a 2017 dogged by spiralling prices and political uncertainty, it’s good to see small business confidence back in the black.
“The resilience of the small firms and self-employed entrepreneurs that make up 99% of UK businesses has lifted economic forecasts for the coming 12 months.”
Those who trade overseas remain broadly optimistic too. More than two-fifths (42%) of small exporters anticipate global sales to grow in the next quarter. Ironically, the biggest barrier to small business growth is in fact the domestic economy. More than half (55%) of small firms surveyed raised this market as an issue.
“Small businesses continue to help keep the nation’s employment levels close to record highs,” added Cherry.
“We need to see more support around managing the costs associated with making that a reality.
“It’s time for the Government to deliver on the promise of a national insurance holiday for small firms that take on those furthest from the labour market.”