Small businesses in the East of England reported a collapse in confidence, according to a report from the Federation of Small Businesses (FSB), during what is, traditionally, the busiest trading period for many.
During the last three months of 2023, small firms in the region showed a significant drop in confidence, trailing behind the rest of the UK. With persistent cost pressures and a widely reported drop in consumer spending, 39% of local small businesses saw their turnover take a hit, compared to 29% that saw their turnover increase.
Candy Richards, FSB Development Manager for East Anglia said “We know that many of our members found the final quarter of 2023 a struggle as customers tightened their belts and reigned in their spending whilst inflationary pressures continued to eat into profits. So, sadly, the findings do not paint a surprising picture.
“However, despite these stark warnings about the real challenges that our small businesses are grappling with, the resilience of our local firms shines through. Nearly half highlighted that they still aspire to grow in 2024, something that is immensely inspiring during these turbulent times.”
The report also highlighted that despite 67% of small businesses in the East of England reporting rising wage bills, only 8% of firms took on new staff. This compared to 15% who cut their headcount.
Candy Richards commented “With nervousness around profitability amongst many small businesses, it is unsurprising that a sense of cautiousness is emerging around taking on new staff whilst the economy remains weak.
“Whilst we did see the Chancellor put in place many of the measures we had campaigned for during the Autumn statement, such as action to tackle late payments and a reduction in national insurance contributions, we must see more to help small businesses in the Spring Budget. Taking decisive action on VAT and increasing the threshold to £100,000 would really help many of our small businesses as well as keeping costs lower for their customers.”
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East of England Small Business Index Q4 2023 Report