The latest Federation of Small Businesses (FSB) Small Business Index is out, and despite a challenging economic environment, business confidence in the East Midlands remains stable, indicating that the stark dips of 2021 caused by changes in lockdown restrictions are finally settling.
Confidence amongst small business owners in the region has remained stable in Q1 at 17 per cent, a slight increase from 15 per cent in Q4 of 2021. However, growth and investment intentions have declined, signalling that for many small businesses their focus is still very much on recovery.
Despite tough trading conditions in which East Midlands small business owners have seen decreases in their net profit, just over half (52%) increased average salaries demonstrating they are doing all they can to retain staff during these challenging times, where interest rate increases, inflation, and rising costs of doing business are taking a toll.
Other key headlines from the report are:
- Although sentiment appears to have stabilised this quarter, compared with a year to date, confidence is much lower.
- With a net balance of 9% across the East Midlands for Q1 2022, the region has reported a decline in terms of net revenue (16% at Q3 2021).
- The employment picture amongst FSB members in Q1 2022 showed that 11% had decreased staff numbers, with the same proportion also increasing staffing levels – leaving an overall net score of 0% for employment in the region.
- In the East Midlands, 52 per cent of small businesses increased the average salary awarded across the business over the last 12 months; with 49 per cent doing so by two per cent or more.
In the East Midlands, the domestic economy (56%), utility costs (41%), and consumer demand (37%) are the greatest perceived barriers to growth over the coming twelve months.
Rav Panesar, FSB East Midlands policy representative, said: “Times are clearly still tough for small firms. Business growth aspirations have declined and investment intentions have dropped, indicating that much more needs to be done to signal a stable economy for small businesses to aid planning and future proofing. It is positive though that business confidence seems to have stabilised and that there are anticipated revenue increases coming over the next three months, which I hope will bolster confidence further.
“FSB will continue to work with and lobby local policymakers and partners on the necessary levers for positive change. As the new East Midlands Policy Representative for the FSB East Midlands, I am committed to working with FSB’s members of staff and volunteer network to understand in more detail what is required to drive confidence and build aspirations across our region.”
