'Gruelling trading conditions'
Small business confidence at lowest for three years
As small business owners from across the UK meet in Glasgow for the FSB annual conference, the latest Small Business Index finds UK small business confidence at its lowest level since 2013.
The report has been published on the day that First Minister Nicola Sturgeon; Labour Shadow Chancellor John McDonnell; and Scottish Conservative leader Ruth Davidson line up to address more than 1,200 small business delegates at the SECC.
Scottish business owners are amongst the gloomiest in the UK, with a majority pessimistic for the first time since 2013. The Small Business Index stands at -2.0, down from +20.4 at the same point a year ago.
Andy Willox, FSB Scottish policy convenor, said: “Scottish firms whose prospects are indirectly or directly allied with the state of the oil and gas industry are of course facing gruelling trading conditions. But the pressures on the massive services sector are also taking their toll. This could explain why Scottish confidence figures lag behind even the depressed numbers for the UK as a whole.”
Almost two thirds (64%) of Scottish business owners have highlighted the state of the domestic economy as a barrier to their own business growth, the study shows. It also highlights that small business revenues and profits are down, although firms predict improvements.
More positively, investment intentions have held steady and credit conditions continue to improve.
Mr Willox continued: “We need to create the right conditions for more local, small and micro-businesses to establish, grow, employ and invest. The next Scottish Government must spend wisely, tax fairly and regulate sensibly.
“With less than two months until the Holyrood elections, we need to hear how Scotland’s political parties’ plan to boost local economies whatever the price of Brent Crude.”
On the FSB conference, he added: “Smaller businesses are a powerful force for good in our communities. We’re ecstatic we’ve secured such a stellar line-up of top speakers and I’m really looking forward to talking shop with decision-makers and business owners.”
The FSB also found a strong indication that a raft of new challenges facing small businesses – included the National Living Wage (NLW), pension auto-enrolment and plans to introduce mandatory quarterly digital tax reporting – may also be contributing to the decline in business sentiment.
Sandra Dexter, FSB Vice-Chairman, said: “Small business confidence has clearly faltered, which is why the welcome small business focus in the Budget is so important. We need a renewed push for growth and productivity – with policy makers delivering a sustained package of support for ambitious small firms.”
Mr McDonnell is expected to spell out his plans to use the banking system to build a national infrastructure fund.
Issues such as cyber security, social media, skills development and new pension rules will be on the agenda.