A recent report by Federation of Small Businesses (FSB) has found that small businesses in the East of England were amongst the most pessimistic in the UK about future profits, with only businesses in the North-East more pessimistic. According to the report, confidence also took a significant hit for the third consecutive quarter, with the East of England tracking behind the UK average.
However, there was also some encouraging news for the region, with the first rise in gross profits since 2017 reported for East of England small businesses, outperforming all other UK regions. And in terms of future growth plans, the report showed that just over half of small businesses expected to grow rapidly in the next twelve months, with 30% looking to increase investment in the coming quarter.
Richard Gapper, East of England Policy Lead at the Federation of Small Businesses, said “With inflation at its highest level for 30 years, firms grappling with unaffordable energy price rises, and a national insurance hike planned for April, it is unsurprising that small businesses are looking to the future with trepidation.
“Although it is pleasing to see that the East of England led the way in terms of an increase in gross profits, the future is increasingly uncertain with many small businesses unsure how they will continue in the coming months. The report reinforces why the Government must rethink the national insurance rise and move swiftly to protect small businesses from the impact of unsustainable inflation.”
In terms of employment, the report identified that the East of England forged ahead of the rest of the UK, with just over one in five small businesses taking on more staff. However, skills shortages were also identified as a particular barrier to growth by 40% of small businesses, with over half increasing wages over the last twelve months to try and retain staff. Richard Gapper says “We know that skills shortages have been a particular problem for many months for our local small businesses who are struggling to both recruit and retain staff. The Government must address this issue quickly with a comprehensive audit to assess the labour market and bring forward policies to support small businesses to recruit in struggling sectors”.