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2-6 February 2020

News & Insight from Retail Jeweller: Small business confidence shows positive signs post lockdown

23 Jul 2020

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The proportion of UK small businesses predicting growth has almost doubled in just three months – from 14% to 27%, according to a report by Hitachi Capital Business Finance.

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The quarterly tracking study examines the percentage of small businesses that predict growth in the next three months.

Following last quarter’s report, which saw the percentage of small business owners predicting growth plummeting from 39% to just 14%, the new findings show the highest quarter-on-quarter rise in five years.

Overall, there were rises in the percentage of small businesses predicting modest growth for the next three months, up from 10% to 23%, or no change, 26% to 43%. The data showed a reduction in the percentage of businesses that fear contraction, down from 31% to 19%, or collapse in the next three months, down by almost two thirds from 29% to 11%.

By sector, the IT/telecoms sector had the highest proportion of small businesses that predicted growth for the three months to 30 September, at 44%. The biggest rises in confidence since lockdown were evidenced in and transport and distribution, up from 8% to 34%, and manufacturing, 9% to 30%.

In retail, the percentage of small businesses predicting growth rose from 21% to 27% and in hospitality growth forecasts rose from 11% to 16% in the three months since April.

Small businesses that had been trading for less than five years and those that employed 10-49 employees were most likely to predict business growth for the next three months to 30 September.

Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, explained: “The latest Hitachi Capital research findings are remarkable for both the scale and the speed of the revival in small business confidence. We knew last quarter that small business confidence would fall as lockdown started and the scale of the fall was a concern, particularly the steep rise in the number of business owners fearing for their survival.

“Many have criticised the Government for easing lockdown too quickly, but our new research - just in - shows what an immediate and positive impact it has had on the small business community. Whilst bigger businesses are having to adjust and adapt at a slower pace, small business confidence across the UK has bounced back and as the engine room of the British economy, today’s figures can give us confidence that small businesses will lead the nation’s effort to rebuild the economy and secure growth.”

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