Uncertainty sees confidence dive among small firms
Step-change in attitudes towards Brexit
BUSINESS confidence is down by nine percentage points compared with the start of the year, according to a survey seen exclusively by The Mail on Sunday.
Uncertainty brought about by Brexit is the biggest challenge facing the Government, according to the latest SME Confidence Tracker, a quarterly survey of more than 1,000 small and medium enterprises from funding provider Bibby Financial Services.
Fifty-nine per cent of respondents said that uncertainty caused by Brexit is damaging to the Government’s ambition for a more productive and prosperous economy.
The research was conducted throughout the recent General Election period and on the eve of the first anniversary of the UK’s decision to leave the EU.
Only 40 per cent said they were expecting sales to increase over the next three months. In the first quarter, 49 per cent were anticipating a rise in sales.
Edward Winterton, UK chief executive of Bibby Financial Services, said: ‘Financial markets don’t like uncertainty, but neither do small and medium- sized businesses. We have seen a strong decline in business confidence over recent weeks and we are now starting to see investment being delayed, which will have further impacts on the economy.
‘Our research in the first quarter showed that two-fifths of SMEs felt that Brexit would make no difference to their business. However, our latest findings reveal a significant st ep- change in atti t udes amongst SMEs.’
The survey revealed that finding new suppliers (32 per cent of com- panies) was the third largest area of investment in the second quarter of this year, behind staff training (37 per cent) and office equipment (33 per cent).
Forty-six per cent of company bosses said the UK workforce lacked the skills needed to enable competitiveness and raised questions about how the UK would fare in accessing talent once it has officially exited the EU.
As part of the survey, SME owners selected their priority demands for the Government. One in five would like it to negotiate a new trade deal with the EU, while 15 per cent want it to establish a trade deal with the EU under World Trade Organisation rules.
And 29 per cent of companies wanted the Government to prioritise lower business rates for small businesses.
Winterton said: ‘ Many SMEs would now like to see the Government get on with the job of negotiating a deal that works for both the UK economy and local business communities alike.
‘Business rates are also a key priority for SME owners. We would welcome any move to reform business rates, which threaten our independent high street shops. This has been an ongoing concern for SMEs for some time and needs to be addressed effectively if we are to maintain our standing as a great place to do business.’
On Friday, the British Chambers of Commerce attended a high-level Brexit meeting with the Department for Exiting the EU and other representatives from the business world.
Business organisations have called on the Government to seek to maintain the economic benefits of the single market and the customs union until a comprehensive final settlement is agreed and implemented.
The BCC has also called for negotiators to agree to start the trade elements of the talks as early as possible, to give businesses on both sides greater confidence and clarity.
BCC director-general Adam Marshall said: ‘Most businesses are a long way away from the theoretical debates we hear in Westminster, and just want answers to the practical, real-world questions they face. “Will our goods get stuck at border crossings? Who can we hire, and for how long? Who do we pay VAT to? Whose regulations and standards do we need to comply with?” and so on.’