South West business confidence lowest in the country says FSB
By Laura Enfield | 5th February 2024
Confidence among the South West's SMEs has fallen to the lowest in the country.
A "worrying" report by the Federation of Small Businesses (FSB) shows it slumped to -37 in the final three months of 2023. Down from -31 last quarter and well behind the UK average of -15.
And a fifth of respondants said they may have to decrease headcount in the current quarter.
The quarterly confidence survey was taken among small business owners and sole traders between 13 December 2023 and 2 January 2024.
Two thirds of small businesses in the South West cited the general state of the economy as the biggest barrier for growth for 2024.
They also highlighted labour costs and the lack of available staff as their second two biggest concerns.
Figures are still well ahead of the same time last year - when regional confidence hit a record low figure.
But Craig Carey-Clinch, the FSB's South West policy representative, said the general tone of the snapshot is not good.
"These figures paint a depressingly familiar picture here in the South West," he said.
"The reality is when confidence is low it affects every aspect of business thinking.
"When businesses lack confidence they take less risks, are less inclined to take staff on and can put growth plans firmly on hold. And none of that is good for the economy as a whole.
"It is a worrying report."
He added: "As we now enter a possible election year we must ensure that all politicians take note of what is happening in the small business arena and make it at the heart of their economic agendas.
"2023 ended on a downbeat note for far too many of our great South West businesses - let us now hope that picture changes quickly and 2024 can see the 'bounce back' we all want to see."
The regional figures were released as part of the quarterly FSB confidence report for England which showed a similar downward trend in small business confidence elsewhere - albeit not quite as marked as in the South West
Tina McKenzie, FSB's policy chair, said: "Small firms are ever the economy's canary in the coalmine, more exposed to shifts in consumer behaviour and changing circumstances due to their lower levels of reserves to fall back on.
"With many fighting hard to keep going amid challenging circumstances, their ingenuity, grit, and tenacity are being tested to the limit."
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