The Index, comprising some 1,600 responses from businesses across the UK, recorded a score of -24.5 – the lowest level since the Index started in 2010 and is a fall of some 15.2 points over the quarter. Given that economic recovery is relying on business investment to create jobs and support the recovery, the ongoing weak sentiment is worrying.
And, with one in eight (12.6%) firms expecting a worsening economic situation in the coming three months, the FSB is calling on the Government to act on policies and initiatives already announced to help boost small business confidence so that they can invest and grow.
Reforms announced by the Government should help too. The FSB has supported many of the policies outlined in the Growth Reviews and the Autumn Statement, such as measures to encourage bank lending to small businesses and boost investment through the seed enterprise investment scheme. Proposed reforms to the planning system and government procurement contracts to increase small firms' access were steps in the right direction too.
However, many of these measures will take time to feed-in. The key now for all levels of government is to focus on implementation: small firms need to see action to match the rhetoric and to see tangible actions that will benefit their businesses and permanently change the business environment for the better.