Falling confidence and profits for small businesses – FSB

The Federation of Small Businesses (FSB) is calling for action to be taken after it released figures showing small businesses in Scotland ended a tough 2019 with falling profits and confidence.

In the final quarter of 2019, FSB’S Scottish Small Business Index (SBI) fell by 13.7 points to stand at -27.2. The fall was mirrored across the UK, where small business confidence fell 13.5 points to -21.6.

At the same time, a net balance of 12.9% of small businesses in Scotland reported falling profits. This is down on the 12.1% negative balance seen in Q2, when the question was last asked.

These figures reflect last week’s official GDP data, which show the UK economy flatlined in the final quarter of 2019.

FSB’S Scotland policy chairman Andrew Mcrae said: “When you look at the turbulent political landscape and the uncertainty about the post-transition trading environment, it’s no wonder confidence has taken a hit.

“We’re not back down at the record lows we saw earlier in 2019, but we’re seeing rising spare capacity and depressed hiring intentions, so we need to act.

“All eyes will now be on next month’s UK Budget to see what the new chancellor delivers for small firms.

“Action on the debilitating impact of late payments would be a great place for him to start. We also need early reassurance that employers will see a practical post-eu immigration system that works for businesses of all sizes.”

The report also reveals that small businesses were unable to maintain employment growth in Q4, with 4% more laying staff off than taking them on.

Mr Mcrae added: “At Holyrood, where we have recently seen common sense on business rates prevail, the Scottish Government now needs to focus on moves to rejuvenate our towns and high streets, get more empty units back into use and support the growth potential of our migrant entrepreneurs.”