Pessimism stalks East’s small companies as uncertainty reigns
- Credit: Mick Howes
Confidence among small business owners in the East of England has slumped to a record low, a new report suggests.
The Federation of Small Businesses (FSB) study found firms in this region were among the most pessimistic – second only to the North-East.
Worryingly, it was the third quarter in a row that confidence among the region’s small companies took a hit, with the East of England trailing behind the UK average.
However, East firms did register their first rise in gross profits since 2017 – outperforming other parts of the UK – and more than half of businesses here are expecting rapid growth over the next year. Nearly a third (30%) want to increase investment in the coming quarter.
East of England FSB’s policy lead Richard Gapper said businesses in the region were racked with uncertainty.
“With inflation at its highest level for 30 years, firms grappling with unaffordable energy price rises, and a national insurance hike planned for April, it is unsurprising that small businesses are looking to the future with trepidation,” he said.
“Although it is pleasing to see that the East of England led the way in terms of an increase in gross profits, the future is increasingly uncertain with many small businesses unsure how they will continue in the coming months.
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“The report reinforces why the government must rethink the national insurance rise and move swiftly to protect small businesses from the impact of unsustainable inflation.”
About one in five businesses in the region were taking on more staff – a higher proportion than in the rest of the UK, the poll found.
But skills shortages were proving a barrier to growth among 40% of small businesses. More than half ramped up wages over the last 12 months to try and retain staff.
“We know that skills shortages have been a particular problem for many months for our local small businesses who are struggling to both recruit and retain staff,” said Mr Gapper.
The government must address this issue quickly with a comprehensive audit to assess the labour market and bring forward policies to support small businesses to recruit in struggling sectors.”