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FSB: Scottish small business confidence falters as profits hit PDF Print E-mail
Monday, 07 September 2015

Scottish small business confidence has cooled, the latest quarterly report from the Federation of Small Businesses (FSB) shows.   The Scottish Voice of Small Business Index now stands at +1.7 points, down from +26 points at the same time last year, and markedly below the UK figure which stands +20.3 points.

The proportion of small firms reporting revenue growth has fallen back, although it remains the case that more have seen their turnover rise than fall.  A balance of 6.1% of businesses reported an increase in revenue, down from 17% at the same time last year.  Profits have also been squeezed: for the first time in five quarters, more respondents reported a fall in profits than reported an increase.
More positively, recruitment and investment intentions have remained firm and credit conditions appear to be easing, the figures show.
The FSB’s Scottish Policy Convenor, Andy Willox, said: “With revenues and profits taking a hit, it’s little wonder that confidence has dropped.
“Even in these choppy waters, though, it’s good to see small businesses continuing to do their bit by creating new jobs and investing for the long term.  And the improving credit market will make it easier to turn firms’ plans into reality.
“Overall, these figures serve as a timely reminder that a sustained recovery is far from guaranteed.  We need to make sure that the small businesses on whom resilient local economies are founded get paid for the work they do, get a fair deal from regulators, and can easily hire the right staff with the right skills.”
This quarter’s other key findings are:
·         The proportion of Scottish small firms reporting revenue growth has fallen back, with a net balance of 6.1% reporting an increase.  This is down from 17.0% at the same point last year (although still represents Scottish small firms seeing rising turnover on average).
·         The net balance of firms reporting rising profits has fallen into negative territory, at -2.8%, ending a run of five quarters of uninterrupted profit growth.
·         A net balance of 5% of small businesses reported that they had increased staff numbers in the past three months.  This is the second consecutive quarter of staffing increases, but only the fourth quarter of growth on this measure since it began in 2010.  Further job creation in the future is expected by a net balance of 7%.
·         37% of companies report that credit is unaffordable, well below the figures in excess of 60% seen in 2012 and 2013. Likewise, the proportion of firms reporting that credit availability is poor has dropped to 48%, down from over 70% across much of 2013.
·         A net balance of 18% of small businesses expect to increase their capital expenditure over the coming 12 months, broadly unchanged from recent quarters.

(Source - FSB Press Release)


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