Small business confidence up and rising

Survey suggests record optimism at the smaller end of the market

Sixty-one per cent of 2,137 small companies polled by the Federation of Small Businesses (FSB) are expecting to expand in the next 12 months – a record level of confidence, according the FSB.

The FSB's Small Business Index, a quarterly survey of members between 30 July and 13 August asking for their views on the next quarter, hit 41 points, which is the first time it has been so positive, it said, with the previous high recorded at 39.7 in Q2 of 2014.

"Eleven per cent [of respondents] expect to grow rapidly. These results make it the seventh consecutive quarter that small businesses have been positive about their outlook," the FSB said in its related announcement.

Respondents based in the North-East region were the most positive in terms of gain, with an average 44 points recorded, up seven points from the year-ago Q3. However, the South-East remained the most confident overall, with a score of 52 points.

"Small firms also report good news on turnover, profits and job creation. Thirty-three per cent of businesses surveyed expect their turnover to grow in the next quarter and 17 per cent expect profits to rise," the FSB said.

Healthcare, social work, and hospitality were the sectors that gained the most in confidence, while financial services was the most optimistic industry group of respondents overall, it said.

Five per cent of small businesses also added staff in Q3 of 2014, the FSB said.

However, weak consumer demand, the domestic economy, and growing skills shortages still require a fix, the business lobby group said, in order to sustain and accelerate growth.