Small business confidence hit three –year low across the UK. The decline is most prominent in London and East London, but all regions across the UK have seen declines. Scotland has fallen into negative territory, also a first in three years.
The Federation of Small Business (FSB) published a report in time for their National Conference in Glasgow that suggests concerns about macroeconomic conditions have been the main reason for dips in confidence. Other challenges facing small businesses include National Living Wage, pensions auto-enrolment and plans to introduce mandatory quarterly digital tax reporting.
Fall in small business confidence in Scotland also coincide with slow economic growth. output rose by 0.1% quarter on quarter in Q2 and Q3 2015, well below UK as a whole. Falling output in manufacturing and a slow growth in key service sectors have been the main reason for low output. In the labour market, employment is rising and unemployment falling.
Despite the decline in confidence, investment intentions remain steady with 19% of small businesses looking to increase their capital expenditure over the next 12 months. This is most likely due to the increased availability of credit. Hiring intentions also remain steady with 7% of small businesses looking to increase staff over the coming quarter.
Small businesses are shown to increasingly look for alternative financing. 9% of small businesses that applied for credit was through peer-to-peer lending or crowd-funding, this is an increase from 4% in Q3 2015 and 6% in Q4 2015.
"Small Firms Hope Budget Measures Will Boost Business Confidence." Small Firms Hope Budget Measures Will Boost Business Confidence. N.p., n.d. Web. 18 Mar. 2016.