Small Firms Worried About Business Prospects in 2016
Confidence among UK's small and medium companies is in decline with many citing overseas demand as biggest threat to growth
The UK’s small firms are losing confidence about business opportunities and growth in 2016 and view overseas demand as one of the “biggest threats to their fortunes” this year; according to the 24th Business in Britain report by Lloyds Bank.
Surveying 1,500 small and medium sized businesses with revenues ranging from under £10m to over £15m, the report found that business confidence in sales, orders and profits for the next six months has dropped from 43% in July and January 2015, to 38% in January 2016.
31% of the businesses surveyed cited weaker UK demand as the main threat to their business (up from 29% in July 2015) while 25% cited a fall in export optimism, particularly for Europe. The net balance of firms expecting to increase exports to Europe was found to be 19%; a marked decrease on the 30% reported in January 2016.
Overall, business confidence was found to be lowest in the North East, Wales and Scotland, and was the highest in Yorkshire and the Humner, Gloucestershire, Oxfordshire and the South Midlands.
Tim Hinton, managing director of mid markets and SME Banking at Lloyds, said of the report: “Business confidence has slipped back slightly as companies see slowing demand as a threat to their business in 2016, both at home and abroad.
“Global economic conditions are causing concern in the short term, with Sterling’s strength against the Euro causing issues for exporters.
“Businesses should continue to be prepared for interest rate rises and currency fluctuations, with the recent decision by the US Federal Reserve a reminder that this benign environment is not here to stay.”