Skip To The Main Content
15 September 2014

FSB announces record confidence among small businesses

Reference number: PR 2014 32

FSB News Release
PR 32 2014
 
Issue date: Monday 15 September 2014
 
FSB announces record confidence among small businesses
 
Latest survey results from the Federation of Small Businesses (FSB) reveal record confidence levels among UK small businesses. The Small Business Index – the FSB''s measure of confidence – reached +41 points in the third quarter. It is the first time the sentiment has reached this level with every sector recording a positive outlook for the upcoming three months.
 
Three fifths of the small businesses surveyed (61%) are expecting to grow in the next 12 months. One in 10 (11%) expects to grow rapidly. These results make it the seventh consecutive quarter that small businesses have been positive about their outlook, again underlining the pivotal role small businesses have played in the economic recovery.
 
Regionally, the North East is showing the greatest gains compared to a year ago, recording a confidence score of +44, compared to -7 in Q3 2013. The South East remains the most confident region overall, registering a score of +52.
 
Small firms also report good news on turnover, profits and job creation. One third (33%) of businesses surveyed expect their turnover to grow in the next quarter and almost a fifth (17%) expect profits to rise. The most confident sector remains financial services (+62), while most improvement was witnessed in health and social work, and in the hospitality industry. Job creation is robust too, with small firms'' hiring intentions at an all-time high. A net balance (+5%) of small businesses increased headcounts this quarter, a trend that looks set to continue in the next quarter.
 
The FSB underlined that this buoyant confidence seen in small businesses depends on pro-enterprise policies that will enable small businesses to grow, create jobs and pay their staff more. The latest results show that barriers to these growth aspirations do still exist. Weak consumer demand, the domestic economy and growing skills shortages especially in growth sectors such as IT are key issues that must be addressed.
 
The FSB wants political parties to spell out how they will continue to support the small business community in driving the economic recovery - especially as we head into party conference season. Small firms want to see measures which will bring the costs of doing business down and enhance their ability to create jobs for the UK economy.
 

Key findings show:

• The Small Business Index rose to +41, breaking the previous record of +39.7 recorded in Q2 2014
• A third (33%) of small firms expect their turnover to rise and 17 per cent expect profits to grow over the next three months
• A net balance of five per cent of small firms increased headcounts in Q3 2014 – the highest increase on record
• A net balance of seven per cent of firms expect to increase staff levels in Q4 2014, pointing to further jobs growth in the future.
• Confidence rose fastest in health and social work, bars and restaurants, and personal services sectors. Financial services remains the most confident sector overall.
• 61 per cent of firms expect to grow in the next 12 months


John Allan, National Chairman, Federation of Small Businesses, said: 

"We''re seeing record breaking confidence from our members which suggests small firms will continue to spearhead the UK''s recovery. We want policy makers to lock in this optimism and continue to back the self employed and small businesses. As we head in to party conference season, we''ll be looking to all the political parties to spell out what they will do to encourage job creation, investment and reward entrepreneurs in the next Parliament."
 
ENDS
 
FSB spokespeople will be available for interview on Monday 15 September in London. The FSB has its own ISDN line.
 
Notes to editors
 
1. The FSB is the UK''s leading business organisation with around 200,000 members. It exists to protect and promote the interests of the UK''s Real-Life Entrepreneurs who run their own business. More information is available at www.fsb.org.uk
 
2. The FSB ‘Voice of Small Business'' Index is a quarterly macro-economic report analysing the trends of small businesses in the UK market. To view the ‘FSB Voice of Small Business'' Index please go to www.fsb.org.uk/small-business-index 
 
3. This report has been produced by the centre for economic and business research (CEBR) for the FSB. The figures are based on a survey of FSB members, carried out by Verve, between 30 July and 13 August and received 2,137 responses. To find out more visit www.fsb.org.uk/survey-panel
 

4. The FSB has began polling its members on their business confidence in Q1 2010
 
FSB media contacts

Liesl Smith: 020 7592 8128/07917 628926 liesl.smith@fsb.org.uk
Jack Neill-Hall: 020 7592 8116 / 07525 801 773 jack.neillhall@fsb.org.uk
James Gribben: 020 7592 81286 / 07854 897974 james.gribben@fsb.org.uk