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Gloucestershire Business News

Reopening triggers increased business confidence

Confidence among small businesses has reached its highest level for more than six years as coronavirus restrictions ease, according to new research.

The quarterly study of almost 1,700 business owners by the Federation of Small Businesses found 58 per cent expect their performance to improve in the next three months with 31 per cent predicting a drop.

The total UK SBI confidence measure reached +27.3 for the quarter - up from -49.3 in the previous three months and in positive territory for the first time since midway through 2018.

And it is the highest level since the third quarter of 2014 when the confidence measure reached +41.

FSB national chairman Mike Cherry said: "It's fantastic that our shops, hairdressers and gyms can get back to doing what they do best all over England from today with some restrictions easing in other parts of the UK as well.

"The certainty provided by the Government's roadmap is filling many small business owners with renewed confidence.

"We live in hope that the virus stays in retreat so the remaining indicative dates for unlocking can be met, enabling our vital night time economies, offices and travel and tourism businesses to get back to it as well. "

The survey found 51 per cent of respondents expect revenues to increase over the coming three months - the highest proportion since the summer of 2015 - with 24 per cent expecting sales to fall, down from 84 per cent a year ago.

Fifty three per cent are looking to grow their firms over the next 12 months, the highest share since the third quarter of 2019 and up from 31 per cent at the same period last year

With the job retention scheme starting to wind down, 14 per cent small firms with staff say they are likely to make some or all of their team redundant this quarter.

"It's worrying to see such a sizeable proportion of employers fearing redundancies over the coming months," said Mr Cherry.

"Initiatives like Kickstart, as well as incentives to take on apprentices and trainees, need to be delivered efficiently over the coming months to protect against a job market shock and support the young people that have disproportionately borne the brunt of rising unemployment.

"Policymakers also need to look at measures to encourage hiring activity. Bringing down the non-wage costs of employment, starting with employer national insurance contributions, which essentially serve as a jobs tax, would certainly help."

"With emergency loan repayments now starting to bite, the Government should carefully consider routes to realising economic value from the facilities it has underwritten: an approach to repayment based on the student loan model and greater adoption of employee ownership trusts could both mark constructive ways forward.

"Lockdowns have caused our £23billion late payment crisis to deepen. As confidence returns, now is the time to bring forward reforms that will help audit committees gain full visibility of payment practices.

"As the economy shifts, support measures need to evolve - particularly where support for start-ups is concerned. The Help to Grow initiative should be urgently reformed in order to both widen its support remit and make it open to all small business owners as they start out, not just those that already have staff."

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