Small Business Confidence Continues To Fall

BACK 01-01-2018

Small business confidence continues to fall as domestic fears weigh on outlook

Small businesses are beginning the new year with increased pessimism as surging operating costs, weak domestic growth and flagging consumer demand hamper profits, according to the latest Federation of Small Businesses (FSB) Small Business Index (SBI).    

The SBI stands at -2.5 in Q4 20171 marking a fourth consecutive quarterly drop in the Index from a year-high of +20.0 in Q1 2017. Almost a third (31%) of firms expect their performance to worsen over the next three months while a quarter (27%) expect an improvement. This is only the second negative reading recorded in the last five years. The first (-2.9) was registered in the wake of the EU referendum.  

A record one in seven (14%) small business owners are planning to downsize, close or sell their business over the coming three months. Three quarters of firms (73%) report a rise in operating costs compared to this time last year. The figure is at a five-year high, with the increase frequently attributed to labour (40%), utility (35%) and input (33%) costs.  

Meanwhile profitability has fallen. The proportion of small businesses (41%) reporting a fall in profits is at its highest since 2013. Click here for more on the story