Southeast FSB Small Business Index Confidence Plummets
The Federation of Small Business (FSB) Quarter 2 Small Business Index for 2022 reveals a painful drop in business confidence. From a +9 rating in the first quarter of 2022, confidence has sunk to -32, levels last seen during the Autumn and Winter of lockdown 2020.
Compared to the national average is -25 the Southeast in an even gloomier position. Over the last quarter, a third of businesses reported an increase in revenue, while just over four-in-ten reported a decrease. Employment levels are discouraging too, with 9% of businesses reporting an increase in staff, and 14% decreasing them. Although it is worth highlighting that three quarters of SMEs have not had any change in staffing levels. Whilst only one-in-ten plan to decrease staff numbers, 16% plan to increase their workforce.
Wage growth shows some positive signs, but not if inflation climbs higher than current levels. Nearly two-thirds of SMEs reported an increase in staff wages, with 58% increasing by 2% or more. Only 6% reported a decrease in staff pay. Similar numbers expect to see wages increase and by 2% or more in the coming year. Just under half of Southeast SMEs plan to grow in the next 12 months. Only 14% plan to downsize, close or sell.
Linda Garcia, the FSB policy representative for the Southeast, said, ‘the Southeast economy is in terrible difficulty. Our SMEs are resilient, but the tipping point is fast approaching. Crippling energy prices, high taxes, soaring inflation and disappearing consumer and business confidence make an appalling greeting card for a new Prime Minister. We hope action will be taken soon on energy prices and taxation to restore business and consumer confidence and do whatever it takes to avert recession.’
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South East Small Business Index Q2 Report