Small businesses feeling the effects of global slowdown

Business confidence among small firms in the UK has fallen to its lowest level in three years amid concerns over both the global and domestic economy, according to a survey by the Federation of Small Businesses (FSB).

UK small businesses
Publication of the report, which said there had been a "significant" fall in confidence among firms in London and the East of England, coincided with the FSB's annual conference in Glasgow on Friday."The results underline the importance of positive measures to support small firms announced in the Budget and the need to maintain support in the face of tough economic headwinds," said the FSB."The top five concerns remain the strength of the domestic economy, weak consumer demand, a shortage of skilled staff, increases to the cost of labour and the burden and complexity of the tax system."The first fall in the value of exported goods since 2012 is particularly concerning. Much of this shift can be attributed to the fall in growth rates across both emerging and developed economies. The challenging international climate makes it even more important that the government pulls out all the stops to support British exporters."According to the FSB's Small Business Index, the fall in confidence, while most noticeable in London and the East, had affected all regions. Scotland and Northern Ireland were the least confident areas overall, with both now in negative territory.Sandra Dexter, FSB vice-chairman, said, "Small business confidence has clearly faltered, which is why the welcome small business focus in the Budget is so important. We need a renewed push for growth and productivity – with policy makers delivering a sustained package of support for ambitious small firms."The Budget included a number of important measures to help smaller businesses, particularly changes to business rates, which will see many small businesses taken out of paying rates altogether."Delivering on tax simplification measures will be vital – as will be pressing ahead with new investment in much-needed infrastructure. Taken together, these measures should help to boost confidence and help small firms to grow and succeed."The survey did find some positive areas for small firms, particularly access to finance with a record percentage of smaller businesses successfully accessing credit in the past quarter, increasingly through peer-to-peer lending or crowdfunding.Ms Dexter said, "The ongoing improvements to small business finance demonstrates how a sustained and focused approach to supporting smaller firms can really pay off. We now want to see a similar focus and long term drive to simplify the tax system, building on positive announcements in the budget and the work of the Office for Tax Simplification. By doing this, we can boost small business confidence levels and support long term, sustainable growth."

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