The latest Small Business Index by the Federation of Small Businesses (FSB) sees business confidence in the East of England plummet this quarter; driven by inflation and the ‘cost of doing business’ crisis.
The quarterly temperature-taking survey by the FSB, reveals a growing level of pessimism across the region amongst small business owners, a sentiment that reflects the national picture.
With a net confidence score of -33 in quarter 3 of 2022, business confidence is dramatically down from -10 in the previous quarter.
Richard Gapper, FSB East of England policy lead said “Small business owners are, by their very nature, optimistic and resilient. But right now, the headwinds against them are gale-force and many will struggle to survive past Christmas.
“With inflation at a record high and consumer confidence having nose-dived as the cost-of-living crisis bites, small business owners are increasingly concerned about the months ahead.”
Despite the current level of economic uncertainty and lack of business confidence, the region has shown some resilience in revenue performance over the last quarter compared to other areas of England. 39% of small businesses across the East of England reported an increase in revenue, whilst 37% outlined a decrease. This net balance figure of 2% is in stark contrast to other areas of the UK which have seen significant falls in net revenue, such as the East Midlands which stands at -32%. However, looking to the future, 42% of businesses in the East of England anticipate a decreased revenue, echoing the nationwide figure of 41%.
The survey reveals that the greatest perceived barriers to growth for small business across the East of England over the next year are general domestic economic conditions and labour costs, with the upwards pressure on salaries hitting cash-strapped small businesses particularly hard.
According to Richard Gapper, small businesses need to see Government bringing forward pro-growth measures in Thursday’s autumn statement, to give them a fighting chance of fulfilling their aspirations to thrive and grow in the coming year.
Richard Gapper said “The Autumn Statement must not just balance the books – it must have a clear set of measures that will help boost prosperity, growth, and jobs.
“The Government should be urgently looking at reforming and reducing pre-profit taxes such as business rates, as promised in the 2019 manifesto, but not delivered, and keeping National Insurance down. Another key area of focus must be tackling late payments, which are an ever- increasing issue for small businesses and are a serious threat to their cash-flow.
“Lastly, the Government must avoid measures that will constrain entrepreneurial activity and growth, such as hikes on dividends, entrepreneurs’ relief, pensions, capital gains, or creating a new online sales tax.”
Click below to read the full report