Business confidence drops after Brexit vote

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Business confidence across the UK has dropped into negative territory at -2.9 for the first times since 2012, according to the Federation of Small Businesses’ (FSB) Q3 Small Business Index (SBI), but Lincolnshire County Council say they’re already working to strengthen it again.

The loss in confidence appears to be down to ‘political shock of the Brexit result’, however the survey also shows positive signs of small businesses proving resilient and getting on with the job in hand, in spite of a fragile economic outlook in the longer-term.

Councillor Colin Davie, Executive Member for Economic Development at Lincolnshire County Council, said: “Given the uncertainty following Brexit, it’s not surprising to find business confidence a little shaken. However, we’ve spoken to a number of firms who are still feeling positive about the future.

“We’re now working to strengthen that confidence. For example, we’re making good progress in establishing relationships with other countries, like China, to bring new exporting opportunities, and we continue to provide expert advice and support via the Business Lincolnshire Growth Hub.

“This work will help ensure businesses are well-positioned to take advantage of our new relationship with Europe and the rest of the world.”

Many firms may have ‘priced-in’ the impact of the EU referendum result in advance of the vote, with others now looking for immediate growth opportunities in the wake of the result of the EU referendum.

The share of small businesses aspiring to grow over the next 12 months also ticked up this quarter, now at 55%, the highest level since the end of 2015.

However, the share of businesses expecting to downsize, close or hand on the business fell to 11%. This is despite a rise in those who report a weakening of the domestic economy in the future.

Mike Cherry, FSB National Chairman said: “For the first time in four years, confidence is in negative territory. This persistent downward trend in UK business confidence reflects underlying issues that predate the Brexit decision.

“Small firms are resilient and will survive the current fragile economic outlook, but to avoid an economic slowdown this data should be a wake-call for our elected politicians. The UK small business community seek key domestic policy decisions if we are to grow, to invest, to export and to create jobs.

“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.”

Simon Beardsley, Chief Executive at the Lincolnshire Chamber of Commerce, said: “We know how hard local businesses work to make each day a successful one for all employees, trainees and volunteers.

“As such, we as a Chamber are more passionate than ever in the wake of Brexit and said news to continue supporting local business as best as we can and ensuring business confidence is not jeopardised by any means. We are a happy business community and will continue to ascertain the opinions and needs of local business through our upcoming events.”