Business optimism in UK plumbs eight-year low

Optimism among small UK businesses plumbed an eight-year low in 2019 in the fourth quarter with Brexit, political uncertainty and slow growth all taking their toll, revealed a study on Monday.

The Federation of Small Businesses’s confidence gauge fell in October-December for the sixth quarter in a row.

Nearly half of the 1,029 firms interviewed, roughly two thirds of which were retailers, expected that their performance would suffer in the first three months of 2020 with only about 25.0% expecting that conditions would improve.

And around 42% of companies said their profitability had taken a hit – the worst tally in five years. On a related note, less than a quarter of exporters expected their sales to pick up over the following three months, which again was the worst reading since 2014.

At -21.6, the FSB’s Small Business Index (SBI) fell to its lowest level since 2011 when Britain's economy was buffeted by a double-dip recession.

Craig Beaumont, the FSB’s director of external affairs and advocacy, said that uncertainty since the 2016 EU referendum had hit smaller firms, making it more difficult to plan ahead.

The FSB’s survey was conducted just before December’s general election.

Beaumont said: “The incoming government has made some very positive commitments to the small business community, particularly where connectivity, employment costs, business rates and late payments are concerned. It now needs to deliver.”