Business Barometer logo

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? 
Very confident 5.4%
Moderately confident 67.6%
Lacking in confidence 24.3%
Not confident at all 2.7%
Don’t know 0%


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%
Remained static? 39.2%
Declined by 1 to 3%? 9.5%
Declined by 3 to 5%? 2.7%
Declined by more than 5%? 2.7%
Don’t know 0%


How has your situation with regard to skill shortages changed in the last 3 months? 
Improved significantly 1.4%
Improved somewhat 2.7%
No change 68.9%
Worsened somewhat 9.5%
Worsened significantly 2.7%
Not applicable 14.9%


How has your situation with regard to finance changed in the last 3 months? 
Improved significantly 5.4%
Improved somewhat 16.2%
No change 67.6%
Worsened somewhat 10.8%
Worsened significantly 0%
Don’t know 0%


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%
Remain static? 33.8%
Decline by 1 to 3%? 4.1%
Decline by 3 to 5%? 0%
Decline by more than 5%? 1.4%
Don’t know 0%

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? 
Significant increase 4.6%
Slight increase 43.7%
No change 39.1%
Slight decrease 12.6%
Significant decrease 0%
Don’t know 0%


Over the last three months, to what extent have you witnessed a change in the number of people wanting to start up a business? 
Increased significantly 1.1%
Increased slightly 31%
Remained the same 37.9%
Decreased slightly 13.8%
Decreased significantly 1.1%
Not applicable 14.9%


Has your clients’ ability to gain access to finance changed in the past 3 months? 
Improved significantly 0%
Improved 5.7%
Remained the same 74.7%
Worsened 8%
Worsened significantly 1.1%
Not applicable 10.3%


Approximately what percentage of your client businesses find that there is a shortage of appropriately skilled and or qualified applicants for vacancies? 
None 3.4%
0-25% 35.6%
26-50% 19.5%
51-75% 24.1%
76-100% 3.4%
Don’t know 13.8%


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? 
None 27.6%
0-10% 51.7%
11-20% 13.8%
21-30% 6.9%
31-50% 0%
Over 50% 0%


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: and

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.

Posted in Business BarometerBusiness financeBusiness growthSMEs