Optimism falls amid concerns about the domestic economy

Economy SMEs

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Research by a leading trade body has suggested a shift in confidence among small and medium-sized businesses.

A comprehensive survey, conducted by the Federation of Small Businesses (FSB), found that more SMEs are feeling pessimistic about the future than optimistic, the first time in four years that this has been the case.

A total of 1,035 business owners were questioned during July and August and analysis of their responses showed that confidence had dipped for the third consecutive quarter.

At the heart of many firms’ concerns are fears that the domestic economy will weaken.

Mike Cherry, the FSB’s national chairman, said: “The political shock of the Brexit result has taken place at a time of weakening business confidence.”

Despite the lingering uncertainty, the FSB tried to reassure the business community that there were nonetheless “positive signs” of smaller firms proving their resilience, regardless of the economic volatility which has followed the summer’s referendum result.

In particular, there is the good news that the proportion of small companies which have ambitions to expand has risen to 55 per cent, which is actually the highest level since the tail-end of last year.

“Small firms are resilient and will survive the current fragile economic outlook, but to avoid an economic slowdown this data should be a wake-up call for our elected politicians,” added Mr Cherry.

“We look to the party conferences and upcoming Autumn Statement to green-light infrastructure projects at local and national level, to simplify the tax system and to help reduce the costs of doing business.”