SmallBusiness confidence in the UK is at a four year low following the largest annual drop in the Federation of Small Businesses (FSB) Small Business Index (SBI) since it started in 2010.
The data, gathered before the EU referendum, reveals FSB members are experiencing falling profits with increases to the cost of labour and the overall tax burden listed as major contributors to a rise in the cost of doing business. The index also saw a sharp fall in investment intentions with just 12.2% of small firms planning new capital investment in the next 12 months – less than half of the 31.9% a year ago.
The extent to which uncertainty caused by the then upcoming referendum is unclear, with other factors also likely to have weighed on small business confidence. FSB data does, however, suggest that uncertainty about the outcome of the referendum is likely to have had an impact on confidence, with investment decisions also being deferred.
Wilfred Mitchell OBE, FSB Policy Chairman for Northern Ireland said: “ The SBI reveals that even before the EU Referendum result was announced, local small businesses were reporting tough business conditions. The EU Referendum decision has left many questions unanswered and it is essential that the case is made for Northern Ireland in forthcoming negotiations to shore up the economy and provide support.”
Mike Cherry, FSB National Chairman added: “For the first time since 2009, the UK economy faces a real chance of a recession. To head this off, we need to do everything we can to support small firms to grow, create jobs, and weather the harsh economic headwinds.
“We need Ministers to take stock and roll back any plans which will make doing business more difficult or costly.”
