For the first time in four years, small and medium sized businesses (SMEs) are feeling pessimistic about their future. Industry body, Federation of Small Businesses (FSB), has found this to be the case in its first survey of business confidence since the Brexit vote in June.
This is the second largest fall in small business confidence in the index’s history and the third quarter in a row that confidence has fallen. The FSB surveyed 1035 small businesses between July and August and found that their concerns around the weakening of the domestic economy are growing.
Small businesses have low confidence, but reasons to be optimistic
These results show that business confidence for SMEs has fallen into negative territory for the first time since 2015, with more pessimism from these businesses than optimism. FSB national chairman, Mike Cherry, spoke to the BBC about the results of the survey; “The political shock of the Brexit result has taken place at a time of weakening business confidence,”
However, the survey also highlighted many signs of positivity as SMEs are proving to be resilient despite a fragile economic outlook because of the Brexit vote. Around 55% of small companies are aspiring to grow over the next year, this is the highest level of growth aspiration since the end of last year.
More positivity came from the fall in the number of businesses looking to downsize, close or hand over their business. Mr Cherry believes these new findings should be taken into account by politicians to spur them on to help these businesses with infrastructure improvements, simplifying the tax system and reduce the costs of doing business.
He said; “Small firms are resilient and will survive the current fragile economic outlook, but to avoid an economic slowdown this data should be a wake-up call for our elected politicians,”
It is difficult to predict the effects Brexit will have on UK businesses, particularly SMEs, due to it being such a long, drawn out process. The fall in small business confidence is a clear indicator that businesses around the UK are worried of the unpredictability surrounding negotiations and our exit strategy.