Western Daily Press (Saturday)
Increase in confidence may be on the horizon
EVER since the Covid pandemic – and arguably even earlier with the uncertainty created by the post Brexit landscape – confidence levels among small business owners have been on something of a rollercoaster.
The FSB conducts in-depth quarterly confidence reports of small business owners and sole traders and for many years these figures didn’t vary much beyond the expected seasonal highs and lows. However, in the past four years or so the figures have altered far more dramatically as business owners had to face an onslaught of change. Repeated Covid lockdowns, political uncertainties, the Ukraine war effect, the cost-of-living crisis, staffing issues and the shock cost rises in many commodities and raw materials (especially with domestic and commercial energy) all had an impact.
It has been an awful lot for businesses to cope with and it is perhaps therefore no surprise that much of the change in reported confidence levels has been in a downward direction. And, sadly, here in the South West those positivity figures have been consistently heading in the wrong direction.
Our latest FSB survey is now under way and, as ever, none of us knows what it will reveal but it will be interesting to see if there is some upward movement as there are genuine signs that perhaps things may finally be turning a bit more positive in the economy which could finally stabilise that confidence graph.
One of the key factors that may be affecting the mood of many SME owners is the fall in inflation. The March inflation figure was 3.4 per cent – the lowest for two and a half years – and a far cry from the somewhat terrifying figure of 11.1 per cent we saw as recently as October 2022.
That doesn’t mean that prices aren’t still going up of course, but the rate in which they are doing so is slowing down quickly which can only help business when they purchase items from suppliers and of
course their potential customers who will have less of a squeeze on their monthly spend.
In addition, the widespread jobs and skills crises we saw hitting particularly hard 12 months ago seems to be easing a little in some (but not all) sectors and crucially the energy price hikes that devastated so many people have calmed down considerably.
These factors – plus the widespread belief that the Bank of England will finally start cutting interestrates soon – are all important in giving business owners more of a reason to look forward positively and so perhaps we may now start to see this reflected in the confidence levels we, and others, report.
We can’t of course be complacent – many of our businesses in this region are still having real, difficult issues to deal with – but after years of seemingly relentless negativity and uncertainty it is important we try to keep a balanced view and start to wonder if there may finally be more reason for cautious business optimism than for some time.