Small business optimism pushes to three-year high

INCREASED confidence is reaching smaller firms, as a number of indicators point toward a modest recovery, according to data released by an industry group today.

The Federation of Small Businesses has registered the highest confidence seen for over three years in its second quarter survey. The group’s index rose to 15.9, from 6.3 in the first quarter, indicating higher optimism. Negative outlooks at the end of 2012 have quickly evaporated.

Sentiment rose in every UK region, with London seeing one of the largest improvements. There were more successes than rejections in applications for credit: 45 per cent said they had been granted a loan, while 42.2 per cent had been turned down.

Entrepreneurs are still concerned about business costs, with 66.2 per cent reporting an increase since the same quarter last year. Rising utility bills were particularly noted as a problem for smaller business.

More owners are now concerned about the impact of regulation and tax to their companies, as well as the long standing worries about credit.

John Allan, national chairman of the FSB noted increased capital investment, and positive intentions to employ more people. Commenting, he added: “this quarterly report should be encouraging for the government, which is placing great stock in the ability of small businesses to grow”.

The Chartered Institute of Marketing mirrored the FSB’s strong outlook, showing that marketing professionals’ confidence has doubled since October. Responses even showed that small and medium-sized companies were more confident than their larger peers.

The Institute of Chartered Accountants in England and Wales also raised its estimates for UK GDP growth in 2013 last week, from one per cent to 1.2 per cent, citing improved attitudes among members.