December 10, 2014, by Kelly Cookson
Has economic recovery improved business confidence for SMEs?
In September 2014 the Federation of Small Businesses (FSB) reported a record-breaking high on the confidence index with a figure of +41 during the third quarter of 2014. Also, the Bank of England estimated a further growth of 3% in the UK economy in 2014. As a result, in the October 2014 Business Barometer survey our panel of UK SMEs and business advisers were asked about confidence in their business amid these reports of economic recovery.
We also asked a set of trends questions to gauge how situations have changed over the last 3 months.
The responses from small business owners were as follows:
|Amid reports of improving economic conditions, how confident do you currently feel about expanding your business?|
|Lacking in confidence||24.3%|
|Not confident at all||2.7%|
|Over the last 3 months, has your business:|
|Expanded by more than 5%?||16.2%|
|Expanded by 3 to 5%?||13.5%|
|Expanded by 1 to 3 %?||16.2%|
|Declined by 1 to 3%?||9.5%|
|Declined by 3 to 5%?||2.7%|
|Declined by more than 5%?||2.7%|
|How has your situation with regard to skill shortages changed in the last 3 months?|
|How has your situation with regard to finance changed in the last 3 months?|
|Over the next 3 months, do you expect your business to:|
|Expand by more than 5%?||13.5%|
|Expand by 3 to 5%?||21.6%|
|Expand by 1 to 3 %?||25.7%|
|Decline by 1 to 3%?||4.1%|
|Decline by 3 to 5%?||0%|
|Decline by more than 5%?||1.4%|
These figures show that, despite growing confidence, skill shortage has worsened more than it has improved, as supported by a small business panellist commenting on the ‘massive skill shortage’, saying they have had to ‘turn down opportunities due to lack of resources’.
Panellist Mike Hunter of Better Languages Ltd. commented on a varied reaction to economic recovery: ‘We are encountering mixed confidence amongst clients, with some businesses doing very well and looking to grow, whilst others are notably more cautious, particularly smaller SMEs.’
UK business advisers were asked about the current demand for business advice:
|Over the last three months, have you experienced a change in the number of requests for business advice?|
|Over the last three months, to what extent have you witnessed a change in the number of people wanting to start up a business?|
|Remained the same||37.9%|
|Has your clients’ ability to gain access to finance changed in the past 3 months?|
|Remained the same||74.7%|
|Approximately what percentage of your client businesses find that there is a shortage of appropriately skilled and or qualified applicants for vacancies?|
|In your estimation, what proportion of your clients’ businesses will have ceased trading in the next 12 months as a result of the problems that they confront?|
The UK Business Barometer and UK Business Adviser Barometer surveys are run by the Haydn Green Institute for Innovation and Entrepreneurship. The results of the surveys are instantly processed and posted on their respective websites: www.ukbb.ac and www.ukbab.ac
Businesses and advisers wishing to contribute as panellists on the project can register via the websites.
The UK Business Barometer has a group on LinkedIn.