The latest Federation of Small Businesses (FSB) Small Business Index is out, and despite a challenging economic environment, business confidence in the North West has seen a slight increase.
Confidence levels have experienced positive movement in Q1 2022 (now standing at 3%). This marks the first time since Q1 2021 that sentiment has improved on the previous quarter, as confidence consistently fell from 39% in Q1 2021 to -4% in Q4 2021.
Signs of optimism
Whilst this may indicate early signs of optimism seeping into the region after the roller coaster of uncertainties associated with the pandemic. It’s also important to note that vs. a year to date, confidence is down by -36% and small businesses continue to focus very much on recovery.
Other key headlines from the report are:
- Despite year-on-year confidence being significantly lower (-36%), confidence in Q1 2022 breaks the 4-quarter downward trend and climbs into the positive
- A marginal increase in revenue has been reported by businesses over the last three months (from 33% to 37%) – this movement resulted in an overall net positive figure for revenue (6%[1]).
- Revenue for the last 3 months has moved into the positive, after reporting negative figures for almost 2 years.
- Small businesses are starting to recover as the proportion decreasing headcount vs. those increasing staffing level has balanced out in Q1 2022.
- Investment intentions for the North West has been fluctuating over the past year, with 20% (down from 33% in the previous quarter) looking to increase the amount of capital being invested in their business (net 4%).
- In the North West, the general economic conditions in the UK (58%), utility costs (31%) and appropriately skilled staff (29%) are the greatest perceived barriers to growth over the coming twelve months.
Business confidence increasing
Paul Wareham North West policy representative, said: “It is great to see business confidence increasing this quarter. I am hopeful that this may indeed indicate that the stark dips of 2021 caused by changes in lockdown restrictions are finally settling. However, times are clearly still tough and much more needs to be done to signal a long-term stable economy for small businesses”
“As our local elections have brought new elected representatives, we will continue to work with and lobby local policymakers and partners on the necessary levers for positive change.”
