Federation of Small Businesses reports record confidence levels among UK small businesses
The Small Business Index – the Federation of Small Businesses (FSB) measure of confidence – reached +41 points in the third quarter of 2014. It is the first time the ‘sentiment’ has reached this level with every sector recording a positive outlook for the rest of 2014.
Three fifths of the small businesses surveyed (61%) are expecting to grow in the next 12 months. One in 10 (11%) expects to expand ‘rapidly’. These results make it the seventh consecutive quarter that small businesses have been positive about their outlook, again underlining the pivotal role small businesses have played in the economic recovery.
Regionally, the North East is showing the greatest gains compared with the same period last year, recording a confidence score of +44, compared with -7 in Q3 2013. The South East remains the most confident region overall, registering a score of +52.
Small firms also report good news on turnover, profits and job creation. One third (33%) of businesses surveyed expect their turnover to grow in the next quarter and almost a fifth (17%) expect profits to rise.
Job creation is robust too, with small firms’ hiring intentions at an all-time high. A net balance (+5%) of small businesses increased headcounts this quarter, a trend that looks set to continue in the next quarter.
The FSB underlined that this buoyant confidence seen in small businesses depends on ‘pro-enterprise’ policies that will enable small businesses to grow, create jobs and pay their staff more. The latest results show that barriers to these growth aspirations still exist. Weak consumer demand, domestic economy and growing skills shortages had to be addressed.
In the lead up to the General Election next year, the FSB wants political parties to ‘spell out’ how they will continue to support the small business community in sustaining the economic recovery, i.e. measures which will bring the costs of doing business down and improve the ability to create jobs for the UK economy.
“We’re seeing record breaking confidence from our members which suggests small firms will continue to spearhead the UK’s recovery,” said John Allan, National Chairman, FSB. “We want policy makers to lock in this optimism and continue to back the self employed and small businesses. As we head in to party conference season, we’ll be looking to all the political parties to spell out what they will do to encourage job creation, investment and reward entrepreneurs in the next parliament.”
Caption John Allan (right), National Chairman, FSB with Business Secretary, Vince Cable