Small Business Confidence Falls Amid Fear of Double-dip
Small business confidence falls amid fear of double-dip
Confidence among small businesses has fallen amid fears of a double-dip recession and rising costs, research by the Forum of Private Business (FPB) has highlighted.
The FPB’s annual Economy Watch survey, which polled 350 small firms, found that business confidence had shrunk compared with last year’s report, with just 1 per cent saying they felt ‘very confident’ about their growth potential, 43 per cent ‘not very confident’ and 11 per cent who admitted they were ‘pessimistic’.
In contrast, last December’s results showed that 36 per cent were ‘confident’ and just 7 per cent felt ‘very pessimistic’.
“While some small businesses have seen improved profitability, and despite many experiencing an upturn in trading conditions during the past year, too often profits are being decimated by a rising tide of costs,” said FPB chief executive Phil Orford. “Finance is also scarce and expensive, so business owners’ ability to maintain any kind of reasonable cashflow is being undermined.
“What is frustrating is that there are small businesses in some sectors that would otherwise be doing okay were it not for these cashflow issues, low consumer confidence and economic turmoil,” he added.
According to the survey, nearly two thirds of respondents complained about rising costs. These included higher taxes (45 per cent), late payments (31 per cent) and mounting finance costs (19 per cent). A fifth said that improving the economy would help their business to grow.
Commenting on the results, a Department for Business, Innovation and Skills spokesperson said the Government was “determined to make the UK the best place in the world to grow a business”.
“We have already cut the tax rate for small firms to 20 per cent, scrapped planned regulations to save business £350 million each year and announced an unprecedented three-year moratorium on new domestic regulation for micro-businesses and start-ups,” he added.