The latest FSB Yorkshire, the Humber & North East Quarterly Small Business Index (SBI) has been published today. It shows small business confidence rising, although still in negative territory. Our small business confidence tracker is at -5. This is higher than at any time since January 2022 and better than the national average of -15. Our region is the most positive in the UK outside of London.

Despite feeling more confident there are significant barriers small businesses tell us they face. Local businesses in our region say the biggest barriers to growth are the general economic conditions in the UK (42%), labour costs (36%) and consumer demand (32%).

Other key findings from the research are:

• The employment picture for small businesses in Yorkshire and the Humber & North East over the last 3 months has improved significantly. Last quarter employment was falling, this quarter slightly more firms are increasing headcount (10%) rather than as reducing it (9%).
• Wages are increasing. In Yorkshire, the Humber & North East, two thirds (66%) of small businesses increased wages over the past 12 months, all of them by more than 2%.
• Our small firms are ambitious. Our research shows 40% of small businesses in Yorkshire, the Humber & North East said that they think they will grow in the next 12 months.

Mohammed Hussain, FSB Policy Representative for the Region, said, “It is good to see positive signs in this research for small business owners in our region and our economy. It has been so tough for so long that any signs of optimism are to be welcomed with open arms. And this research shows we should be thankful to local small business owners for increased jobs and wages.

“However, we shouldn’t allow this to mask the more negative findings from this research. Inflation, energy prices and weak consumer demand are hurting small businesses. For many firms it has been a long period with little growth.

“Small businesses are the canaries in the coalmine, more exposed to shifts in consumer behaviour and changing circumstances due to their lower levels of reserves to fall back on. But they are also the engine for growth. Now is the time to capitalise on the positives and support small business owners to grow the economy. We have asked the Government to increase Employment Allowance, stop energy firms hiking standing charges and increase the threshold for small firms to start paying VAT. We will support them to tackle late payments and encourage small firms to export.”