Confidence among the UK’s small businesses has slumped, reaching its lowest level since 2013, figures released today have revealed.
According to the Federation of Small Businesses (FSB) Small Business Index, an analysis of business sentiment in the first quarter of the year, all regions have shown a decline in SME confidence, with the sharpest falls in London and the east of England.
The survey also revealed the first decline in the creation of new jobs by British small businesses since mid-2013.
Push for growth and productivity
While some experts suggest that SMEs would be buoyed by measures announced in Wednesday’s Budget, doubt surrounding Britain’s membership in the EU, and a backdrop of imminent challenges – such as pensions auto-enrolment, the National Living Wage, and quarterly tax reporting for the self-employed – have created uncertainty.
Sandra Dexter, FSB vice chairman, said: “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 publication of the report coincides with today’s (18 March) FSB conference in Glasgow, at which Scotland’s First Minister Nicola Sturgeon is expected to address more than 1,200 delegates. She will be joined by Labour Shadow Chancellor John McDonnell and Leader of the Scottish Conservatives Ruth Davidson.
On the agenda will be some of the main barriers to Scotland’s growth highlighted in the Index, the top five of which were: the strength of the domestic economy; weak consumer demand; a shortage of skilled staff; increases to the cost of labour; and the burden and complexity of the tax system.
Public sector reliance harms NI
In Northern Ireland, where confidence ratings are negative, the Index highlighted the region’s dependence on the public sector, resulting in fewer jobs and capping pay.
Dexter added: “The ongoing improvements to small business finance demonstrates how a sustained and focused approach to supporting smaller firms can really pay off.
“We now want to see a similar focus and long-term drive to simplify the tax system, building on positive announcements in the Budget and the work of the Office for tax simplification.
“By doing this, we can boost small business confidence levels and support long term, sustainable growth.”