According to data from the Federation of Small Businesses, confidence among smaller firms has improved since the end of 2010. It’s refreshing to read about such a rare pocket of optimism, at a time when most people seem to be about as buoyant as a lead wetsuit.
While the FSB’s Voice of Small Business Index reported drops in small business confidence for each consecutive quarter in 2010, it jumped back in the first quarter of this year with a healthy 36% of small firms expect overall business performance to pick up in the next three months.
If small businesses are becoming more bullish, they haven’t been confident enough to start taking people on again. In fact, the employment picture seems to be getting worse, if anything. At the end of 2010, the Index found that even more businesses were expecting to cut jobs.
That’s hardly an encouraging stat, particularly since unemployment figures released last week showed both female and youth joblessness rising in the three months to February.
John Walker, the FSB’s chairman, described this as a ’worry’, saying that the private sector (including SMEs) has been earmarked by the government as the key to creating the jobs that will help the economy bounce back from the public spending cuts.
Indeed, it’s perhaps no surprise that business confidence is weakest in those areas heavily dependent on the public sector. Small firms in Northern Ireland are least confident at -25%, and Wales is second lowest at -11%.
It is worth saying that statistics from the FSB are usually on the gloomy side and Walker concluded his comments that SMEs had to deal with a ‘rush of challenges’ from the VAT increase, inflation and soaring fuel prices.
