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News - 12 March 2013

Growing optimism amongst small businesses

A report from the Federation of Small Businesses (FSB) has found signs of growing optimism among small businesses in the UK ahead of the Chancellor's 20 March Budget.

Their survey, which questioned 2,686 people in the first quarter of 2013, found that business confidence increased from a negative reading of -5.6 in the final quarter of 2012 to +6.3 in Q1 of 2013.

However, while business confidence has increased, investment intentions have fallen, with the stalling domestic economy and access to finance cited as the biggest barriers to growth.

The FSB said businesses are also exercising 'tentative' caution, with 54 per cent expecting to see growth this year; down by two per cent year-on-year.

Other key findings in the report include:

  • The falling cost of businesses finance: 38.6 per cent of small firms that applied for finance received interest rates of less than four per cent - up from 25 per cent in the same quarter last year
  • Firms expect to marginally increase staffing levels over the next three months
  • Financial and business services firms remain the most optimistic about the business environment, while retailers and manufacturers expect conditions to deteriorate
  • Rising fuel (56 per cent) and utility costs (51 per cent) were cited as the main drivers of increasing business costs.

John Walker, the FSB's national chairman, said:
"It is great news that confidence is beginning to edge up and is back in positive territory. This bodes well for GDP figures for Q1 and we would expect them to be better than the -0.3 per cent recorded in Q4 2012.”

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
 “This is great news for the UK and local economy, but we know that inflationary pressures are likely to persist in 2013, especially through rising energy bills and fuel costs and this will affect disposable incomes."

The FSB are calling for the Chancellor to use Budget 2013 to put firm plans in place for the Business Bank and create alternative lending channels for smaller businesses.

If you need any help and advice for your business on financing, cash-flow, management accounts or business development, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail:

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