Small business confidence in East Midlands at highest since EU referendum

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The confidence of small businesses has bounced back to pre-referendum levels, whilst East Midlands businesses look at a rise in operating costs, according to a new report from the Federation of Small Businesses (FSB).

The FSB’s Small Business Index (SBI), which reflects how firms expect to perform over the coming quarter, hit +24 across the region in Q4 2016, up from -6 in the preceding three months.

This means that more businesses feel confident than feel the opposite. Small business confidence rose to +8.5 for the UK as a whole in Q4.

Some 63% of small firms in the East Midlands expect profits to remain the same or increase in Q1 2017.

Amid a fall in the value of the pound, almost half of exporters surveyed expect to increase overseas sales.

Small businesses in the region are facing challenges, however. Some 65% report an increase in the cost of doing business compared to the same period last year, with labour costs mentioned most frequently as the main cause of this increase.

While sterling depreciation has provided a boost for exporters, one in five firms sees it as a primary cause of increasing business costs alongside a related rise in raw material costs.

David Dexter, Regional Policy Chairman for FSB in Greater Lincolnshire and Peterborough said: “It is very encouraging to see small business confidence rebounding here in Greater Lincolnshire.

“While we are in a period of uncertainty and some risk, it is important to be optimistic about the opportunities which may lie ahead.

“But Brexit is far from the only thing on the minds of people running small businesses.

“We now need the Chancellor to present a truly pro-business Budget on March 8. This should include an increase in the Employment Allowance to help ease the burden of increasing business costs.”