Small business confidence ‘at lowest level since pandemic’
By Sarah Wood | 26th January 2023
Confidence among small business owners has fallen, according to the Federation of Small Businesses (FSB).
According the FSB's Small Business Index, headline confidence figure in the final quarter of 2022 fell to its lowest level since the second Covid lockdown at the start of 2021.
Confidence levels were -46 points, down from -36 points in the third quarter, as reported by This is Money.
Small businesses report being weighed down by inflation, rising utility bills, supply chain delays and delivery problems.
Retail and hospitality businesses were among the hardest hit in the final quarter of last year - a traditionally lucrative time of year - according to the FSB.
A growing number of small businesses reported a drop in sales and their outlook for the coming months is pessimistic, with 44% expecting to see a fall in revenues.
And the proportion of small businesses which saw employee numbers go down outweighed the number which saw staff numbers increase.
Late payments are still a big problem for a significant number of small businesses, with three in 10 saying the situation had got worse over the last three months.
The FSB wants to make the audit committees of large corporates responsible and accountable for supply chain payment practices and see the introduction of a legal requirement that payment times and conditions be published in annual reports.
Martin McTague, national chair of the FSB, said: "Small businesses' confidence is at its third-lowest level since we started tracking it nearly a decade ago.
"Falling consumer spending, inflation and high energy bills are all taking a toll, and poor results after the golden quarter are particularly disappointing.
"Small firms are a fantastic national resource of innovation and creativity - especially if given the right conditions to flourish. These results are incredibly worrying, but they are not the final word."
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