FSB research shows small business confidence is low…

FSB research shows small business confidence is low but they are key to economic recovery

The Federation of Small Business (FSB) have today released their latest Regional Small Business Index (SBI for Yorkshire, the Humber and the North East. The tracker survey shows business confidence remains fragile with utility costs and the tax burden adding to business owners difficulties. However, despite the tough trading conditions, a third of small businesses are still looking to grow over the next year and only a small minority are cutting staff numbers. The research shows small businesses will be the engine of future regional economic growth.

The quarterly SBI measures small business confidence. For the three months up to last December, the confidence tracker figure has fallen to -58, from an already low of -38 previously. This figure for business confidence in the region is at its lowest since the quarterly survey began outside of Covid.

Business point to the overall poor economic environment as the reason why. Specifically, the tax burden on small businesses and high energy prices are seen as the biggest factors holding businesses back.

Despite the difficult economic outlook for small businesses, the report also provides evidence that small businesses can be the engine of economic growth with the right support. Nearly a third (31%) have high or moderate growth ambitions for the coming year. The majority (84%) have no intention of reducing staff numbers with a small number looking to increase numbers.

Mohammed Hussain, FSB Policy Representative for the region, said:

“It is no secret that it is a tough time for many businesses. I am not surprised to see confidence so low. Business owners have had to show a lot of resilience over the last few years.

“The important thing to take from this report is not how bad it is – we know this – but how much potential for economic growth small businesses provide. This report shows small businesses keeping staff and, in many cases, increasing their pay. It shows that many firms are still planning to grow. This is how we will get economic growth in our region and how we will support and build our local areas.

“But to do this, businesses need some support. Taxes and energy costs are seen as major hurdles. If the Government is prioritising growth. This is where they should look first to support our vital small business community within the region.”