Research published by the Federation of Small Businesses (FSB), shows that confidence levels amongst West Midlands Small Business owners is at its highest level for a year and ahead of the UK average.
Its West Midlands Small Business Index (WMSBI) quarterly report summarises findings from comprehensive research, which investigates small firms’ recent performance, current circumstances, and future aspirations. The latest edition covers the first three months of 2023
It shows that there has been a sharp increase in confidence amongst the region’s small business owners compared to previous reporting periods. In fact, confidence levels have entered positive territory for the first time since the beginning of 2022 and the West Midlands is the most optimistic of all UK regions..
On revenue generation, the position has moved from negative to neutral, with 34% of firms now reporting an increase, the same number as reporting a decrease. Meanwhile the outlook for future profits is really positive, with almost twice the number of respondents expecting an increase (41%) than expect a decline (22%).
There is also positive news with regards to regional SMEs’ growth and investment aspirations. Half (50%) expect to grow in the next 12 months, compared to just 1 in 20 (5%) who expect to downsize, sell or close their business. Plus, marginally more expect to increase capital investment in their business (21%) than expect to decrease it (17%) during the coming quarter.
It’s a slightly more mixed picture for employment and wage growth. For while the overwhelming majority of firms (81%) reported that staff levels had remained unchanged, more than 1 in 10 (12%) had reduced employee numbers and only 1 in 20 (5%) had increased them.
Unsurprisingly, the greatest perceived barriers to growth over the next year remain the general economic conditions in the UK (73%), followed by rising utility costs (38%) and increasing labour costs (27%).
Rob Harrison, the FSB’s West Midlands Policy Representative and Director of local communications agency Glued, commented:
“The findings in our latest WMSBI are testament to the tremendous resilience and determination of our regional small businesses. They have overcome the disruption caused by events such as the UK’s exit from the EU, national political upheaval and global events such as the pandemic and major, disruptive conflicts, to start 2023 in a much more confident manner.
This is a welcome step forward and the Federation of Small Businesses remains committed to working with local stakeholders and national government to built on this positive momentum and to create the best possible conditions for small business creation and growth”.