Confidence surges among North West small firms

Despite many small businesses still feeling the devastating effects of the COVID-19 pandemic a new study from the FSB shows North West firms are fighting back. Tony McDonough reports

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The North West economy is now opening up again after lockdown


A new study reveals confidence among small businesses in Merseyside and the North West is higher than the national average.

Latest quarterly Small Business Index (SBI) from the Federation of Small Businesses (FSB) reveals firms in the region are bouncing back from the devastating impact of the COVID-19 pandemic.

Confidence measure for the North West in the first quarter of 2021 stands at +39. This is a huge improvement on the -57 figure recorded for the final quarter of 2020. This figure is matched by the South West and West Midlands, and surpassed only by the East Midlands. It also stands higher than the UK SBI measure of +27.3.

North West small firms’ investment intentions were the highest of all the UK regions, at 27% – a figure that moved into positive territory for the first time since Q2 2020. The average UK figure was 18%.

The survey also shows 66% of small businesses in the region expect their performance to improve this quarter, compared to fewer than one in three (28%) that expect theirs will worsen. More than half (52%) expect their revenue to increase over the coming three months, with just under a quarter (23%) expecting sales to fall.

Click here to read the full FSB SBI report

FSB England policy unit representative for the North West, Paul Wareham, said: “It’s fantastic that our retailers, our hairdressers and other businesses such as gyms are now up and running for what is actually the first time this year.

“Our members, by and large, have welcomed the Government’s roadmap for easing lockdown restrictions, and we’re all hoping the virus doesn’t create any unexpected deviations from the current course – that would be a disaster.

“But it’s clear from our NW SBI report that if everything goes to plan businesses on the whole are optimistic about the trading prospects for the remainder of the year.”

FSB’s latest survey offers signs of hope amid other indicators showing small firms in the region are still suffering. The latest Red Flag survey from insolvency experts Begbies Traynor shows more than 11,000 firms in Liverpool city region are in “significant financial distress”.

Mr Wareham added: “Confidence levels are a vast improvement compared to the previous quarter in the North West, to the extent we are now back in positive figures for the first time since early 2020. The vaccine roll-out and easing of lockdown measures are likely to be contributing factors to this.

“However, it’s concerning whilst the number of North West businesses losing staff has improved since Q4 2020, overall net employment is still negative (-10%). Also, with emergency loan repayments now starting to bite, and as the economy shifts, support measures need to evolve – particularly where support for start-ups is concerned to ensure this confidence is realised.

“What business need now is certainty. While we aren’t out of the COVID-19 woods just yet, many business owners will be banking on a restriction free remainder of the trading year as they begin the job of rebuilding.”

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