"Let's make this a Small Business Summer"
“These latest findings show that local firms remain resilient and defiantly optimistic."
The Federation of Small Businesses (FSB) has published its latest West Midlands Small Business Index report, which tracks small business confidence across the region.
Its findings are based upon comprehensive research that looks into small firms’ recent performance, current circumstances, and future aspirations.
The latest report, covering the first quarter of 2022 paints a mixed picture, highlighting areas for concern alongside more positive trends. For example: the proportion of small businesses reporting a decrease in staffing levels doubled, compared to Quarter 4 2021. This is the first time negative net employment growth has been reported since the beginning of 2021.
There are significant wage bill pressures, with almost two thirds of respondents seeing their average salaries increase during the past 12 months. An even greater proportion expect average salaries to rise during the next 12 months.
The main barriers to growth were seen to be domestic economic conditions, rising input costs and weak consumer demand. Regional small businesses are less optimistic than they were this time last year, although their outlook is more upbeat than it was in the previous quarter.
The more positive findings include two fifths of respondents seeing an increase in revenue, which is more than those reporting a decrease. Almost half expect an increase in revenue in the next three months. More than half of expect to grow rapidly or moderately in the next 12 months.
Most encouraging of all, more than a quarter expect to increase capital investment, with the region’s small businesses being well ahead of those in the rest of the UK in terms of their net investment intentions.
Hollie Whittles, FSB’s West Midlands Chair and director of two local small businesses commented: “These latest findings show that local firms remain resilient and defiantly optimistic, even though they are facing serious challenges. With small firms accounting for more than 99 per cent of all regional businesses, FSB is urging Government and decision-makers to go further - to address the key challenges they face, such as the increasing cost of doing business, late payment and the gaps in business support.
“The message from us to policymakers and corporates alike is clear: let’s make this a Small Business Summer – backing the 99% on which our local and national recoveries will depend.”