FSB uncovers North-South divide in small business confidence
The latest Small Business Index (SBI) from the Federation of Small Businesses (FSB) for Q4 2015 shows a growing gap in confidence between businesses in Scotland, North East England and Wales and those in the Midlands and the South of England. While there is good news for the UK as a whole in terms of job creation, increasing revenues and improving productivity, firms in the North East of England, Scotland and Wales risk being left behind.
In the last 12 months, smaller firms in the North East, Yorkshire, Scotland and Wales have all shown a year-on-year decline in confidence. In Wales, confidence has dropped into negative territory for the first time in two years. In Scotland, confidence levels are at their lowest levels since the start of 2013. Elsewhere confidence levels have remained stable, supported in particular by firms in technology and business/professional services.
“A clear divide in confidence is now emerging across different parts of the UK, with businesses in the South and in sectors like technology and professional services feeling more positive about 2016. The recent flooding is likely to further weigh on business confidence in the North where small firms are now beginning to pick up the pieces as the waters recede.
Overall confidence across the UK remains in positive territory standing at 21.7 points which is 4.1 points higher than Q4 2014. Nearly two thirds (59%) of businesses anticipate growth relatively unchanged from the last quarter, with almost one in four firms (24%) reporting a growth in revenue in the last three months, the highest since 2010.
Smaller businesses are still leading the way on job creation with firms reporting that they have expanded their staff in the last three months, with more planning to do so this Spring.
John Allan continued: “Although confidence is patchy across the UK, small businesses continue to show they are resilient, leading the way on employment growth and productivity.
“Increased productivity and stable economic growth are helped by a low inflation environment. This increase is the sixth consecutive quarter of rising productivity. It is clear that small firms are improving their use of capital equipment, providing better staff training and finding new ways to be more efficient.”