The final South East Federation of Small Business (FSB) Small Business Index (SBI) for 2023 makes depressing reading. It reports a cumulative downward trend of business confidence across 2023. From a positive rating of 4 at the beginning of 2023, every quarter showed worsening levels of business confidence. At the end of 2023, business confidence in the South East slumped to -27. This is well below the UK average of -15.
Feedback on revenue and employment show significant problems for small business in the South East. Small firms reported a reduction in net revenue from 6% in Q3 to -14% in the last quarter. Again, it is well below the UK average of -6%. For the first time in 2023, small businesses reported a net reduction in staffing numbers. In Q4 2023, 11% of small businesses increased staffing levels, but 16% decreased them.
Looking ahead, small businesses are more pessimistic than they were a year ago. 39% of businesses plan to grow, compared to 18% that plan to contract, downsize, or sell, with a net score of 21%. Last year that net score was 26%.
Ian Ross, regional chair for the FSB in the South East, said, ‘these results show worsening business conditions for small firms in the South East. At the start of 2023 we saw a healthy post-Christmas bounce that took business confidence into positive territory. This year’s figures show a worsening slump. With confidence dipping every quarter, it shows that businesses are struggling, and little has eased the burdens they face. Policy makers need to act to support small businesses urgently to stem the tide of worsening business confidence.’
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South East Small Business Index Q4 2023 Report