FSB: Small firms experiencing a tentative recovery, FSB statistics reveal

Ten months of FSB data shows small firms are beginning to enjoy an improved outlook.

Small businesses which were hit hard by the worst of the credit crunch and the recession nearly a year ago are starting to experience a tentative recovery, according to analysis by the Federation of Small Businesses (FSB) which has documented the economic downturn’s impact on small firms since last September.

A comparison of FSB data collected over the past ten months suggests that the economic position small businesses are in is starting to improve since a low point at the end of last year.

A rising number of small businesses are now experiencing an increase in trade, with the latest poll showing 23 per cent of FSB members noticing a rise compared with 16 per cent in February.

By the end of last year, up to 40 per cent of small businesses had highlighted the cost of finance as a big problem. Now 25 per cent cite the cost of finance as a concern, which indicates that small firms are seeing a very gradual easing.

According to the latest poll, 68 per cent of business owners are looking to act on a rise in confidence and say they plan to grow in the next six months, with firms hoping to invest in new products, more staff and marketing.

Over half of respondents (57 per cent) said they were ‘quite confident’ about the future prospects of their business. The FSB is urging the Government to ensure small firms can be at the forefront of tackling unemployment by supporting apprenticeships, short-time working subsidies and increasing the thresholds before Income Tax and National Insurance contributions are payable, which would benefit employers and employees.

John Wright, National Chairman, Federation of Small Businesses, said:

“Small businesses are naturally flexible and innovative in recessions and these figures show that despite the very many negative forces on them, they are being cautiously optimistic and are looking to expand. Although we are certainly not out of the woods yet, many small firms are seeing increased footfall and finding it easier to obtain crucial finance in the winter months, when things were at their worst so far.

“The Government must look to small businesses to build the post recession economy and help them employ more people and ease the bureaucracy and tax burdens which many still face.”

ENDS

Notes to Editors

The FSB is the UK’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk
4,400 small business owners responded to the online poll between 19 and 23 June 2009. Email marc.shoffman@fsb.org.uk for full results

Contacts
Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128 / 07917628998
Prue Watson 020 7592 8121 / 07825 125695
Marc Shoffman 020 7592 8113 / 07595 067068