Last week it was reported that confidence among large UK businesses had slipped to a six month low, causing some concern among economists. However, it appears that this is not an outlook shared by the small businesses community where optimism continues to grow indicating that, for local economies at least, stability is set to continue.
According to a new survey by the Federation of Small Businesses (FSB), three fifths of SMEs questioned expect to post growth within the next year, with this confidence reflected in all sectors of the economy.
Regionally, the North East of England showed the most improved attitude yet the South East remained the most positive overall, perhaps due to upcoming investment programmes such as the HS2 and Crossrail projects.
National chairman of the FSB, John Allan, used the opportunity to reinforce his belief that small businesses have been instrumental in boosting the economic recovery of the UK as a whole.
He said; “We’re seeing record breaking confidence from our members which suggests small firms continue to spearhead the UK’s recovery.
“We want policy makers to lock in this optimism and continue to back the self-employed and small businesses.
“As we head into 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.”
The quarterly survey conducted by the FSB has long been an indicator of small business economic performance in the UK, and this latest result marks the seventh consecutive quarter of rising confidence.
Although the financial services sector remains the most confident, other areas such as manufacturing, construction and leisure are increasingly catching up due to buoyancy within the housing market and an increase in consumer disposable income.
Of course, the survey does not guarantee that the economy will continue to grow, yet its findings have generally been backed up by data from the Office for National Statistics (ONS).
In its latest report, it showed that the economy grew by 3.2 per cent in the second quarter of this year when compared to the same period in 2013, reinforcing the correlation between business confidence and economic stability.
Another aspect of the FSB’s survey – relating to small business finances – was also highlighted, with one third of the firms surveyed expecting to increase their turnover during the next quarter. A further fifth of respondents expected their profits to grow, allowing for more investment that can only benefit the commercial property market.
As international financial bodies from the OECD to the International Monetary Fund have expressed a confidence in the UK remaining the fastest growing developed economy for some time to come, conditions for businesses in the country are expected to continue to improve.
However, with the upcoming Scottish independence referendum causing concern for national firms, it seems small businesses will be hugely important in maintaining growth momentum going forward.
