Glos small business confidence still growing- despite red tape

Confidence among Gloucestershire small businesses has risen to the highest level in over a year despite spiralling business costs, according to the latest Federation of Small Businesses.

Confidence among Gloucestershire small businesses has risen to the highest level in over a year despite spiralling business costs, according to the latest Federation of Small Businesses.The Federation of Small Business’s (SFB) Small Business Index (SBI) stands at 20.0 in Q1 2017, the highest figure since Q4 2015, and up considerably from the -2.9 recorded after the EU referendum.

The strong recovery has been spurred by increased international trade. A net balance of 15.6% of small firms report a rise in export activity during the past three months, with a net balance of 30.5% expecting international sales to increase over the next quarter. Both figures are at their highest level since the SBI began.

Mike Cherry, FSB National Chairman, said: “It’s hugely encouraging to see our small businesses trading more overseas, driving an exports-led recovery. We know small firms that export have higher turnovers than those who rely on the domestic market, so it’s crucial that the Government maximises cross-border trade opportunities for small firms.

The recovery in the headline SBI comes despite a surge in the cost of doing business.

A net balance of 64.5% of small firms report an increase in operating costs over the past quarter, the highest proportion since the summer of 2013. Fuel (36.8%) and labour (35.9%) are cited most often as the main causes of this increase, with the exchange rate (26.9%) also frequently flagged.

The average FSB employer will face £2,600 in additional employment costs over the coming year as a result of the rise in the National Living Wage, resulting National Insurance contributions and auto-enrolment. These cost pressures are being exacerbated by rising inflation. The Consumer Price Index (CPI) rose above the Bank of England’s 2% target to 2.3% in March. Firms are struggling with increased prices when buying supplies, products and services, but the rise in inflation will also impact other bills, such as business rates.

Mike Cherry continued: “At a time of unprecedented political and economic uncertainty, small firms are being hit from all sides by mounting cost pressures. This month alone many have had to absorb a hike in business rates and the National Living Wage. Added to this are costs that have steadily risen, such as fuel, which our members are increasingly pointing to as a major cause of higher outgoings.

The net balance of small businesses intending to increase employment over the next three months is also up, to a near two-year high of 11.3%. However, the balance of small firms reporting higher headcount for the last quarter has fallen from 2.9% in Q4 to 2.1% in Q1.

The SBI now stands in positive territory across most UK regions. Scotland is the exception, having posted negative confidence for five straight quarters, though its Q1 figure (-10) is the highest since Q2 2016. The East Midlands reports the highest confidence levels for this quarter (39.3) while London has rebounded from -1.7 in Q4 to 24.5 in Q1.

So if you would like some help with your business’s administration from someone with several decades of financial experience here in Gloucestershire you can either ring us now on  – email us on edith@esbaccountancy.co.uk or click the Contact Us buttonpayroll bookkeeping services small business help contact esb accountancy gloucestershireor please fill the form at the bottom of the contact us page.

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