Less than Two in Five Small Firms Expect to Grow in First Quarter of 2016
Increased competition, lack of domestic demand and late payments are thought to be major factors impacting business confidence
Only 36% of UK small businesses expect to grow in January to March 2016, according to business funder Bibby Financial Services (BFS).
BFS’ latest confidence tracker shows that growth expectations have plummeted with 35% of small firms not planning to invest in their business at all in the first quarter of this year, while one in five expect declining sales.
The survey suggests that increased competition, lack of domestic demand and late payments from customers are the top challenges facing small businesses today, with almost a third of respondents having stated that the uncertain UK economic environment is holding them back from future investment.
Of all parts of the UK, Scotland appears to be worst hit for business confidence with only 29% of Scottish business owners and decision-makers expecting sales to increase, compared to the national average of 36%.
This latest report comes just a week after Lloyds Bank announced that small and medium business confidence in sales, orders and profits will drop significantly
David Postings, global chief executive of Bibby Financial Services, believes small and medium business owners have a dampened outlook on the UK economy.
Postings said: “Small and medium enterprise confidence is plummeting, while investment is only being made if it is essential. Concerns over the uncertain UK economic environment are strengthening, suggesting that small and medium enterprises believe the recovery is losing steam.’’