Confidence among small business owners is slowly returning, the Federation of Small Businesses’ (FSB) latest Small Business Index reveals.
According to its findings, the headline confidence measure has bounced back significantly from the -45.8 points recorded in the last quarter of 2022 up to lightly negative territory at -2.8 points. However, this is still below the 15.3-point reading registered in the first quarter of 2022.
Declining sales have been an issue for many small firms this year. Two in five said their revenues fell in first three months of 2023 (41 per cent), compared with one in three who said they had seen an increase (34 per cent).
The revenue outlook for the next quarter was viewed with more optimism, however, with two in five small businesses (39 per cent) expecting to see their sales rise against one in four (26 per cent) bracing for a decline.
The FSB, which represents more than 150,000 business owners and self-employed workers, surveyed nearly 700 people to collate the Small Business Index.
National chair Martin McTague comments: “Small firms may be about to turn the corner and rebound after the pandemic and the energy crisis, with confidence recovering alongside improved optimism for Q2.
“However, there are still plenty of dark clouds on the horizon that could dampen small business recovery. The prospect of further interest rate rises is causing significant disquiet, at the same time that costs remain at serious highs.
“In addition, the withdrawal of the Energy Bill Relief Scheme leaves a group of small firms exposed to high prices in fixed-rate contracts from last year unable to negotiate a new contract.
“While our research may provide a glimmer of hope that things are looking up, it’s important to remember that small businesses have shown incredible grit and determination in the face of adversity, and these figures are a real testament to that.”