Small businesses reveal long term confidence concerns
Confidence among small businesses is declining, as more are pessimistic over the future than are positive, new research has revealed.
It marks the first time in four years that this is the case, according to the Federation of Small Businesses, who point to uncertainty over Brexit as a major factor.
The latest survey is the first since the June vote and reveals the second biggest fall in small business confidence since the Index was first created.
Concerns that the economy could weaken have slowed investment and have caused some businesses to suspend expansion plans.
Confidence has fallen for three consecutive quarters with FSB National Chairman Mike Cherry blaming the last decline on the “political shock” of Brexit.
More than 1,000 small firms were questioned between July and August for the Index, which entered negative territory for the first time in 2012.
The rise in the number of pessimistic owners reflects a range of issues, mainly regarding concerns over new employment regulations and the potential impact of Brexit on sales and company finances.
The FSB does however, say that there are “many positive signs” of firms across the UK being resilient in recent months, as 55% of firms still expect to grow over the year.
This is the highest level since the end of 2015 while 11% of businesses told the Index they expect to cut staff numbers, close or hand on the business in the next 12 months.
Firms facing difficulties or a change in fortunes could consider a range of alternative finance options to get them back on track, or may wish to undertake an independent business review to ensure a financially secure future.
Mr Cherry has suggested that the Government will need to act to reduce the costs of doing business and simplify tax rules in order to ease the pressures faced by small businesses.
A similar survey by the CBI business lobby group last month revealed that many smaller manufacturers fear a decline in order volumes in the current quarter.
Business optimism among those manufacturers is at its lowest level since January 2009, highlighting the need for potential action.
By Phil Smith
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