Study shows small business confidence bounce-back

Published:  23 July, 2020

With the end of the MOT extension in sight, and the easing of lockdown meaning more custom coming through the door, you would expect business confidence to rise in the aftermarket. Now, new figures have shown that the proportion of all UK small businesses predicting growth has almost doubled in just three months – from 14% to 27%.

The figures are the latest results from a rolling quarterly tracking study by Hitachi Capital Business Finance. Three months ago in the last instalment of the study, the percentage of small business owners predicting growth fell from 39% to just 14%. In fact, the latest findings show the highest quarter-on-quarter rise in five years.   Overall, the percentage of small businesses predicting modest growth for the next three months, rose from 10% to 23%, while the proportion expecting  no change rose from 26% to 43%. This meant there has been a reduction in the percentage of businesses that fear contraction, down from 31% to 19% in the next three months.

 The biggest rises in confidence since lockdown were evidenced in and transport and distribution (up from 8% to 34%) and manufacturing (9% to 30%), where the resurgence of growth forecasts was striking. There were also significant rises in sectors hardest hit by lockdown: In retail, the percentage of small businesses predicting growth rose from 21% to 27%.   The research also suggests that smaller, more agile enterprises will be the fastest to adapt to the UK’s re-emergence from lockdown. Small businesses that had been trading for less than five years (35%) and those that employed 10-49 employees (37%) were most likely to predict business growth for the next three months (to 30th September).   Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance commented: “The latest Hitachi Capital research findings are remarkable for both the scale and the speed of the revival in small business confidence. We knew last quarter that small business confidence would fall as lockdown started and the scale of the fall was a concern, particularly the steep rise in the number of business owners fearing for their survival. Many have criticised the Government for easing lockdown too quickly, but our new research - just in - shows what an immediate and positive impact it has had on the small business community.

“While bigger businesses are having to adjust and adapt at a slower pace, small business confidence across the UK has bounced back and as the engine room of the British economy, today’s figures can give us confidence that small businesses will lead the nation’s effort to rebuild the economy and secure growth.”

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