According to the report, the Q1 Voice of Small Businesses Index, small firms’ confidence has increased but their investment intentions have fallen as the domestic economy and access to finance continue to act as barriers to growth.
Indications of confidence moved from a negative reading of -5.6 in Q4 2012 to +6.3 in the first quarter of 2013. This confidence was, however, tempered with caution as fewer businesses expect to grow this year, with figures down from 56 per cent in Q1 2012 to 54 per cent in Q1 2013.
John Walker, national chairman at FSB, commented: “It is great news that confidence is beginning to edge up and is back in positive territory. This bodes well for GDP figures for Q1 and we would expect them to be better than the -0.3 per cent recorded in Q4 2012. However, we know that inflationary pressures are likely to persist in 2013.”
The FSB cites a drop in the number of firms applying for finance as of concern, and it has since emerged that the government’s Funding for Lending scheme, which was launched in July 2012, will be “put on steroids” according to Nick Clegg, deputy prime minister, following a significant lending decline in Q4 2012.
Adviser comment:
Adrian Lowcock, senior investment manager at Bristol-based Hargreaves Lansdown, commented: “Funding for small businesses has worked a little bit, but the statistics do show a small drop. This is partly due to the climate, in that small businesses don’t want to borrow as much, but neither are banks lending as much. It would be good to see more done to help smaller businesses as the UK has always been a good breeding ground for entrepreneurs in the past.”
