FPB survey shows SME confidence falling amid economic turmoil
BUSINESS confidence has fallen compared to a year ago, according to the Forum of Private Business’ Economy Watch member panel survey.
Just 1% of respondents were ‘very confident’ (2010: 5%) and 27% ‘confident’ (2010: 36%) about their future prospects, compared to 43% who are ‘not very confident’ (2010: 39%), 11% ‘pessimistic’ (2010: 5%) and 6% ‘very pessimistic’ (2010: 7%).
Despite improved trading conditions for almost half of all panel members, and an upturn in profitability for over a third, a weak economy and increasing business costs mean many firms are still struggling to win business and make a profit.
Factors such as increasing taxation (45%), mounting late payments (31%), rising finance costs (19%) and increasing training costs (19%) show that cash flow issues are the major barrier to small business growth, combined with a weak economy.
Phil Orford, the FPB’s chief executive, said: “Too often profits are being decimated by a rising tide of costs. Finance is also scarce and expensive, so business owners’ ability to maintain any kind of reasonable cash flow is being undermined.
“What is frustrating is that there are small businesses in some sectors that would otherwise be doing ok were it not for these cash flow issues, low consumer confidence and the economic turmoil they are facing.”
Orford added: “While the Economy Watch survey took place before the autumn statement, the government’s economic policies come out quite well.
“We welcome measures to boost the provision of affordable funding, free firms from red tape, give them greater control over their staffing and training needs and ease slightly some of the impending tax increases they are facing.
“However, the message that emerges from the issues identified in the research is that small businesses need more support in these areas, much more.”
