Small Business Confidence Hits 3-Year High
Figures from the Federation of Small Businesses (FSB) show that SME confidence is on the rise…
The latest Small Business Index from the FSB has been released and the figures show that confidence amongst small businesses is at its highest level in three years.
The Small Business Index is the FSB’s measure of confidence in the SME sector and the latest figures are the second highest since the Index began in 2010.
Topping the list of confident businesses are financial services firms. An increase in house prices through the year so far may have contributed to this with real estate firms benefiting from the renewed levels of confidence.
The government’s "Help to Buy" scheme, announced in the budget, may also help to boost this sector of the economy and provide further stability as the year pans out.
The FSB has voiced its expectations that the Chancellor, George Osborne, will further build on this confidence in his forthcoming Spending Review (June 2013).
Looking into the details of the Small Business Index, there is further confidence amongst small firms with many expecting to increase their turnover in the next three months and to see business growth within a year. Small businesses are also expecting to take on more staff and also boost their exports, despite an overall downturn in world trade.
And whilst finance businesses are the most confident Britain’s small retailers are the least optimistic.
Amongst small fri ms biggest costs are rising energy bills. The FSB has noted this and is calling for an end to "rollover contracts" and pushing for business energy prices to follow falls in wholesale energy costs.
John Allan, the FSB’s National Chairman, said of the findings:
"After five consecutive quarters of year-on-year growth, confidence is moving in the right direction. Small firms want to employ more people and grow their business. They want to export and expect turnover levels to increase."
"This is all good news, but we must not be complacent. The Chancellor must use the Spending Review to build on this optimism. While there are positive signs, inflation and not being able to access finance will affect how quickly, and how much, small firms can grow and create jobs."
Regarding energy costs, Allan concluded:
"We know inflation is likely to remain high for the coming 12 months, largely due to rising energy costs. This is why reform of the sector is so important and why it must provide transparency for small firms to choose the best tariff for them."
Read the Small Business Index for Q2 of 2013 here.