Confidence among small businesses has reached record levels, research by the Federation of Small Businesses (FSB) has shown.
The FSB survey revealed that small firms in all sectors improved their outlook for the fourth quarter of 2014. Personal services experienced the biggest increase in confidence during Q3, while the financial services sector remains the most confident overall.
The poll of more than 2,000 small businesses found that all UK regions have gained confidence during 2014. The north east saw the most improved outlook in Q3 but the south east remained the most confident region overall.
Many small firms are forecasting increased turnover and profits following a strong third quarter:
- 20% said turnover increased over the last 3 months
- 8% reported an increase in profits
- 61% expect to grow over the next 12 months; 11% are predicting rapid growth
- 33% expect their turnover to increase in Q4
- 17% are predicting profit growth in Q4.
The survey also found:
- 5% of firms hired more staff in Q3
- 7% plan to recruit staff in Q4
- 23% expect exports to increase over the next 3 months
- 25% plan to increase capital investment over the next 12 months.
Barriers to growth remain despite increased financial stability and an upturn in confidence:
- 46% said the domestic economy is presenting an obstacle to growth
- 37% cited weak consumer demand as a problem
- 29% said a lack of skilled staff remains a barrier.
John Allan, national chairman of the FSB, said:
“We want policy makers to lock in this optimism and continue to back the self-employed and small businesses. As we head in to party conference season, we’ll be looking to all the political parties to spell out what they will do to encourage job creation, investment and reward entrepreneurs in the next Parliament.”