Small Business Confidence on the Rise, Report Claims

Businesses’ confidence about the economic outlook increased slightly in August, new figures have indicated.

Accountancy firm BDO’s monthly Business Trend Index (PDF) revealed a small, but significant, increase in optimism among firms — from 95.1 in July to 95.5 in August. The Index also suggested that output growth will continue for the next two quarters.

However, BDO partner Peter Hemington said that UK business confidence was moving “up and down like a yo-yo” and this “still points to only marginal growth in the UK economy at the beginning of 2012”.

“That said, the first quarter of next year looks set to be better than the fourth quarter of this year,” he said. “I’m cautiously optimistic this trend will continue.”

“Increased optimism could be attributed to a gradual shift in attitude,” added Hemington. “The world has changed a lot since 2008 and understandably it’s taken a while for UK businesses to adjust. There may now be less impatience about the rate of growth and greater acceptance that it will take longer for things to improve.

“Small businesses can help maintain confidence levels by having the courage to continue to recruit and invest. It’s important to maintain faith in the long-term prospects of UK businesses.”

British Chambers of Commerce director of policy Adam Marshall agreed:

“Many small firms are looking bullish, telling us they want to increase staffing over the coming months because they believe additional orders and sales lie ahead,” he said. “But it’s a complex picture, with firms in some sectors and areas more optimistic than others.”

Small Business Confidence on the Rise, Report Claims

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