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Small firms optimistic about growth

POSTED: 3rd October 2014
IN: Business news
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Confidence among the UK's smaller firms has reached an unprecedented high, according to recent research from the Federation of Small Businesses (FSB).

Confidence among the UK's smaller firms has reached an unprecedented high, according to recent research from the Federation of Small Businesses (FSB).undefined

The lobbying group's Small Business Index reached +41 points in the third quarter of 2014, breaking the previous record of +39.7 set in Q2 this year.

Six out of ten (61 per cent) small companies are anticipating growth in the coming year and 11 per cent are optimistic they will achieve rapid expansion. Short-term sentiment among these organisations has now been positive for seven consecutive quarters.

According to the FSB, this underlines the "pivotal" role small and medium-sized enterprises (SMEs) have played in the economic recovery.

Asked about their expectations for financial performance, a third (33 per cent) of respondents anticipated growth in turnover in the next quarter and 17 per cent forecast higher profits.

While every sector involved in the survey had an upbeat outlook for the next three months, financial services was the most confident about turnover and profit. The health and social work field and the hospitality industry achieved the biggest improvements in this regard.

Regionally, there has been notable progress in business attitudes in the north-east, where the FSB confidence rating increased from -7 in the third quarter of 2013 to +44 in the same period this year.

With a score of +52, the south-east remains the most positive region overall.

John Allan, national chairman of the FSB, said: "We're seeing record-breaking confidence from our members, which suggests small firms will continue to spearhead the UK's recovery.

"We want policymakers 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."

One recent recommendation from the federation is for enterprise partnerships between local authorities and businesses to engage more with SMEs, putting these firms at the centre of plans to stimulate growth in local economies.

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