October 17, 2011

SMEs less confident as GDP growth falls

by Jan Harris

Optimism among UK small businesses has taken a battering following a 0.1 per cent downwards revision in GDP growth for the second quarter of this year.

According to the Federation of Small Businesses’ (FSB) ‘Voice of Small Business Index’, UK SME confidence fell by 9.6 points from a positive 0.3 to -9.3 in the third quarter of 2011.

Six per cent of the 1,600 FSB members surveyed said they expected to lay off staff by the end of the year.

This is the largest increase in firms expecting to lay off staff since the survey began at the beginning of last year.

The FSB is calling for a targeted VAT cut and a national insurance contributions (NICs) holiday, in order to offset the effects of weak demand causing revenues to fall, while costs are rising.

It believes this would encourage firms to take on more employees.

There was a particularly marked fall in confidence among companies in the leisure, sports and entertainment and hospitality sectors, as well as a sharp fall in manufacturing confidence.

In contrast, small business confidence in the US is improving, according to the National Federation of Independent Business.

The organisations ‘Small Business Optimism Index’ for September rose 0.8 point to 88.9, showing the first improvement in SME confidence for seven months.

Discuss this in the Internet Business forums

Story link: SMEs less confident as GDP growth falls


Leave a Reply


Previous: «
Next: »

Visited 2504 times, 1 so far today

Tags: , ,

Posted in: All News,Business