According to the Federation of Small Businesses (FSB), small business confidence has reached a record level: for the first time the Small Business Index has reached +41 points, with every sector reporting a positive outlook for the next quarter.
61% of small businesses surveyed by the FSB said that they expect to see growth over the next year and 11% anticipated “rapid growth”. This marks the seventh consecutive quarter that small businesses have reported a positive outlook.
One third of businesses surveyed predict that their turnover will increase in the next quarter, in addition to 17% expecting profits to rise. Financial services reamins the most confident sector, while health and social work and the hospitality industry have both been recognised as “most improved”.
The FSB attributes this unprecedented level of confience to pro-enterprise policies, and says that these measures will need to continue and expand in order to enable small businesses to see future growth, lead job creation, and increase staff wages accordingly.
However, the latest results also show that there are still remaining barriers to these growth aspirations. Weak consumer demand, the domestic economy and growing skills shortages in growth sectors (such as IT) are vital issues that need to be addressed if growth is to continue.
John Allan, national chairman of the FSB has said:
“We’re seeing record breaking confidence, which suggests small firms will continue to spearhead the UK’s recovery. We want policy makers to lock in this optimism and continue to back the self employed and small businesses.”
Words: Peter Cribley