Half of small firms predict no growth over the next year
FSB National Chair Martin McTague
FSB Small Business Index reveals mixed picture
Confidence levels back in positive figures despite bleak outlook for some industries
Latest quarterly Federation of Small Businesses (FSB) Small Business Index (SBI) paints a mixed picture across industries as insolvencies double.
Close to half of small firms do not expect to grow over the coming year amid a cost-of-doing-business crisis and widening sectoral optimism gap, according to the latest SBI from FSB.
Despite 87 per cent of small business owners stating operating costs are up on last year, the overall SBI UK confidence reading is back in positive figures meaning more small business owners expect an improvement in their commercial performance over the coming quarter than expect the opposite.
Hospitality and communications sectors cited the greatest levels of confidence but manufacturing, wholesale and retail firms revealed a bleaker picture as surging operating costs, supply chain disruption, labour shortages and consumer belt-tightening weigh on expansion plans.
The majority (55 per cent) of small business owners say they are operating below capacity against a backdrop of global supply chain disruption, labour shortages and rising wages, which was confirmed by an ONS survey showing one in seven businesses not currently fully trading.
FSB National Chair Martin McTague said, ‘It’s encouraging to see small business confidence back in positive territory, though the picture across sectors is distinctly mixed.
‘The small business community shrank in size to the tune of hundreds of thousands over the pandemic. With Covid numbers now falling, this needs to be the summer where we start to reverse that trend – policymakers should be doing all they can to facilitate and encourage start-ups and side hustles.
‘The message from us to consumers, policymakers and corporates alike is clear: let’s make this a small business summer – backing the 99 per cent on which our recovery will depend.
‘Taking forward our joint proposal with the TUC for a small business sick pay rebate, adopting our recommendation to make audit committees directly responsible for supply chain practice, and launching a new trade support fund for small firms would go a long way to helping many to start firing on all cylinders again.’
