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FSB East Midlands publishes latest Small Business Index

FSB East Midlands publishes latest Small Business Index

The East Midlands Small Business Index (EMSBI)[1] <#_ftn1>, which measures confidence amongst businesses, has risen in Q4. The index score now sits at -23% after having been at -29% in the last quarter.

Confidence in business performance in the East Midlands for the next 3 months shows slight recovery despite suffering from economic uncertainty due to the pandemic.

Compared with year-to-date, East Midlands small businesses are less positive about business prospects for the next three months

·Over the last 3 months, East Midlands small business owners have been among the least impacted regions in terms of profit.

1 in 4 (19%) of East Midlands small businesses have decreased the amount of staff employed in Q4.

The investment intentions for East Midlands businesses have moved into positive territory for the first time in 2020 (7%) – with more businesses increasing investment vs. decreasing investment.

After an improvement to the confidence index seen in Q2, uncertainty due to COVID-19 in Q3 re-instilled pessimism in the region. Now this pessimistic outlook seems to be dissipating slightly in the East Midlands, as Q4 scores are an improvement on the preceding quarter; something which isn’t the same among the rest of the UK.

Whilst some uncertainty is apparent among East Midlands small businesses, it is not quite as high as in other parts of the country. The East Midlands is the only region to record an index score above -30, indicating the region is more confident about the upcoming quarter than others in the UK.

Just above the East Midlands as the regions least impacted for gross profits was North East & Yorkshire & The Humber, where a net change of -27% was recorded.

When it comes to predicting future profit, the East Midlands is the most positive, with a net balance of -14%. Despite still being in negative territory, it is a figure which is more optimistic than its counterparts around the UK, where North East & Yorkshire & The Humber (-38%), West Midlands (-35%) and North West (-42%) are the next closest.

The employment picture amongst FSB members over the preceding three months showed that 19% had decreased staff numbers, and 6% had increased staff intake. This also demonstrates that the actual number of FSB small business owners to lose staff in the last 3 months was higher (19%) than what companies predicted three months prior (14%). Nevertheless, the majority of small businesses have been unaffected, as two thirds (67%) reported that their staff levels have ‘stayed the same’. For the next quarter the intention is for 16% of businesses to increase staff intake and 11% to decrease staff numbers.

/FSB Development Manager Natalie Gasson-McKinley said: //“Small firms have long demonstrated how resilient they can be and our survey does indeed show that there is tentative optimism for the year ahead. However, there is still much work that needs to be done at a local and national level to ensure that businesses get the support and financial assistance they have been told is out there. Business owners are fighting to hold their place as contributors to our local economy, but they are battle weary.”**/


/FSB East Midlands Policy Representative Clare Elsby//said: “//The East Midlands Small Business Index (EMSBI) shows how small firms have an air of optimism in the region and profits are less impacted when compared to the rest of the UK. Yet we mustn’t forget that confidence still remains in negative territory and businesses are still struggling with this latest lockdown – particularly those who have been forced to close. /


/“In a policy paper FSB published at the end of last year, ‘//A Fighting Chance’, it showed that the proportion of small firms carrying some form of debt has risen from just over half (56%) to more than three quarters (69%) as a result of the Covid-19 pandemic, with the share describing their debt as “unmanageable” up from 13% to 40%. Many firms are now ladened with debt and hurtling towards repayments. Many will be fearing for their futures, questioning whether it’s worth pushing on, even if they know their firm will be successful in the long-term.”/


/“One recent positive announcement is the Supreme Court’s decision to rule in favour of policyholders in the landmark Financial Conduct Authority (FCA) business interruption insurance test case. For many, it has been a long and difficult road to get to this stage so this will bring clarity and hope to the thousands of firms which have been left in financial limbo for almost a year./

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