Confidence is recovering among region's small businesses, report claims
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Lower inflation, progress on Brexit talks and a positive Spring Statement are helping confidence among the East of England’s small businesses to recover, a new report shows.
Around a third (32%) of the region’s firms expect their performance to improve over the next three months, while nearly four in 10 (38%) expect it to remain the same, the Federation of Small Businesses (FSB) said.
Its quarterly small business index (SBI) also found 64% of small firms are seeing revenues either stable or increasing, while almost half (48%) expect to expand their operations over the next year and 28% are planning to increase investment.
The quarterly SBI measure for the East was 0 for the first quarter of 2018, up from -4 in the final quarter of 2017.
The domestic economy remains the biggest barrier to small business growth for firms in the East, with almost half (48%) of firms polled raising it as an issue.
Consumer demand, regulation and appropriately skilled staff are other frequently flagged problems.
East Anglia area lead Mike Drain said recent announcements on business rates and late payments should help to soothe some firms’ frayed nerves.
“After a 2017 dogged by spiralling prices and political uncertainty, it’s good to see small business confidence in the East improving,” he said.
“We’ve campaigned for an end to the £14bn late payment crisis, reform of the regressive business rates system and an overhaul of VAT, so it was good to see the chancellor address these challenges at the Autumn Budget and Spring Statement.
“Positive comments from the chancellor, along with agreement on a Brexit transition period and falling inflation, should make it easier for small businesses in our region to plan, invest and grow in the months ahead.”
But Mr Drain warned consumer- facing firms are still trying to keep their heads above water after a year of customer belt-tightening and business rates hikes, while small retail firms will be hit by a rise in the national living wage and auto-enrolment contributions next month.
A separate report by Grant Thornton suggests barriers such as sales capability, business networks, and supply chains are preventing East of England firms from adding £5bn a year to the region’s economy.