The Federation of Small Businesses’ Small Business Index (SBI) has taken a downturn, landing at -15.0 points for Q4 2023.
This fall in confidence, from -8.0 points in Q3, signals heightened anxiety among small businesses amidst economic pressures.
The FSB’s survey revealed that 40% of small firms experienced reduced revenues, and over 14% are bracing for a business contraction, marking a clear call for a growth-oriented Spring Budget.
Tina McKenzie, FSB’s policy chair, commented on the findings: “Losing the ground made up in the third quarter in terms of the overall confidence level among small firms should be a wake-up call to the Government and to decision-makers.”
She highlighted the crucial role of the Spring Budget in reversing the decline in confidence and called for measures to foster growth and aid small businesses in navigating the current economic landscape.
The survey also unearthed the impact of cost pressures, with 82.5% of small businesses reporting higher operational costs than the previous year, although this marked a slight improvement from Q3. The anticipation of a subdued start to 2024 in terms of revenue growth underscores the pressing need for supportive fiscal policies.
McKenzie further emphasised the need for immediate action to address late payments and to boost small business cash flow, suggesting such measures could play a pivotal role in stabilizing the small business sector and underpinning the broader economy.
