Small business confidence up, statistics reveal

The Federation of Small Businesses has released its Small Business Index (SBI) figures, which show 65.3 per cent aspiring to grow moderately or rapidly in the next three months.

The statistic is the highest since the SBI was set up in 2010.

West Sussex FSB regional chairman Antonio Falco said: “The results of the Q2 Small Business Index are very positive and show the major role that small businesses play in the growth of the UK’s economy.

“It is critical the new Government continues to develop the right environment to support businesses planning to grow, invest and take on new staff in the next 12 months.

“In the Budget and its upcoming Enterprise Bill, ministers should prioritise supporting small business growth, simplify business taxes, raise skills and tackle poor payment practices.”

The FSB says productivity is also growing – despite the issue proving an ongoing puzzle in recent years.

The FSB Productivity Index shows that annual output per hour for workers rose by 1.4 per cent year-on-year in quarter four of 2014 among small firms.

This compared with 0.3 per cent in the economy as a whole. The levels of spare capacity, an important factor in interest rate decisions, have dropped from a balance of 47.7 per cent to 40.7 per cent.

Rob Harbron, managing economist of Cebr, which produced the report on behalf of the FSB, said: “These results give much cause for confidence and show that the UK’s small business population will be instrumental in supporting economic growth in 2015.

“Confidence is stabilising and low inflation is boosting profit growth. Strong capital investment intentions and increased worker productivity are encouraging as they play a key role in a sustainable economic growth path.”

While the overall mood of businesses shows confidence steadily returning to the economy, the survey results continue to suggest that the recovery is not taking grip equally across the country.

The South East continues to dominate its business confidence followed by the West and east Midlands. Wales have seen a fall in confidence, with a fall in employment, and confidence figures are lower in Scotland.