The latest quarterly small business confidence report for the South West from the Federation of Small Businesses shows that confidence has risen amongst SMEs since the end of last year – but there are still many concerns around the economy, recruitment and rising costs.
The report shows that compared to the previous quarterly report, which came out in January when Omicron fears were still prevalent, confidence amongst the region’s SMEs has definitely improved. However, the overall figures are still in negative territory – i.e., those who feel confident are in the minority – and the report also reveals that the South West is now the least positive region for SMEs in the whole of the UK.
The upturn in confidence amongst some SMEs is reflected in the fact that of the businesses who took part in the survey four times as many expect to take on staff compared to those planning to cut back. Almost one in two of the local FSB members surveyed predicted their business will grow either moderately or rapidly in the coming year.
Among the main concerns expressed by South West respondents was the problem of finding appropriately skilled staff to fill vacancies – nearly four in ten said this was a major barrier to growth.
The FSB’s regional policy representative, Craig Carey-Clinch (pictured) said the results of the 2022 quarter one survey offered some hope but said that things on the ground were still very difficult for many of the region’s small business owners and self-employed.
“The overall picture seems to be that confidence amongst members – though still disappointingly low compared to most of last year – is creeping up again and this is something we must feel encouraged by.
“However, the sooner we can see the South West off the bottom of the league table for business confidence the better. We must all hope that happens as soon as possible.”
The regional report is part of the wider national FSB quarterly survey which also revealed that 87 per cent of small business owners state that operating costs are up compared to this time last year citing fuel, utilities and taxation as major contributors to that increase.
It also shows that recovery and confidence varies across sectors. Firms in the accommodation and food sector which have benefitted from relaxed travel rules, were among the most optimistic but manufacturing, wholesale and retail firms were more negative as surging operating costs, supply chain disruption, labour shortages and consumer belt-tightening weighs on expansion plans.
FSB National chair Martin McTague said the mixed picture shows there is still a lot of work to do to get small businesses back at the heart of the economic recovery.
“The small business community shrank in size to the tune of hundreds of thousands over the pandemic. With Covid numbers now falling, this needs to be the summer where we start to reverse that trend. The message from us to consumers, policymakers and corporates alike is clear: let’s make this a small business summer – backing the 99 per cent of businesses who are SMEs on which our recovery will depend.”