This quarterly report tracks small business confidence across the region, based upon comprehensive research into small firms’ recent performance, current circumstances, and future aspirations.
It shows that the region’s small firms are battling increased costs and increased uncertainty, yet remain defiantly optimistic about the future.
During July - September, more of the region’s small businesses saw their revenues decline than saw them increase. In fact, the East Midlands fared worse than all other UK regions in this respect. Looking ahead it’s a similar picture, with more expecting the position to worsen than improve.
The period also saw more small businesses decreasing employment than increasing it. Looking ahead, the majority predicted that there will be virtually no net employment growth overall.
Salary costs were an area where costs increased, with the majority of those surveyed saying they had seen rises, which they expected to continue in the future.
When asked about growth aspirations, respondents were split more or less down the middle, with just under half expecting to grow in the next 12 months. However, there’s been a big jump in the proportion of regional SMEs predicting that capital investment will stagnate in the future, with 8 out of 10 expressing this view, compared to less than half feeling this way in the previous quarter.
Regional small business owners felt that the main barriers to growth are the general economic conditions in the UK – by far the biggest concern - followed by increasing utility costs, then consumer demand.
Rav Panesar, small business owner and FSB’s East Midlands Policy Unit Representative commented:
“It’s heartening and impressive to see that, despite so many obvious challenges and storm clouds gathering, overall confidence levels amongst our East Midlands small businesses remains above the average for all UK regions.
However, the gloomy statistics on so many measures only reinforce the point that the cost of doing business crisis must be tackled effectively and urgently – before it becomes a small business confidence crisis.
The new Government must act immediately, to bring the stability and certainty needed for small businesses to trade profitably now . . . and to plan effectively for the future.”