Businesses in the North East, Yorkshire and Humber are reporting a sharp decline in confidence, according to a new survey.
The quarterly Small Business Index from the Federation of Small Businesses (FSB) has fallen from a score of +1% in the first quarter of the year to -26% in Q2. The score for the North East, Yorkshire and Humber region is below the national average of -24.7%, and the worst since records began apart from the pandemic.
The results come as cost pressures, rising taxes and labour shortages are making life difficult for many small businesses. Those pressures have also seen business investment sentiment turn negative, the survey found, while nearly two-thirds of businesses int he region said they’d increased salaries to help cope with staffing issues.
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The number of small businesses in the area taking on new staff (12%) outnumbered those who are losing staff (16%), however.
Richard Askew, England policy representative for the FSB, said: “The cost of doing business crisis has worsened to the point where confidence is now at its lowest recorded figure outside of periods when significant trading restrictions aimed at halting the spread of Covid were in place. Small firms continue to try to absorb additional cost pressures and manage the challenges surrounding labour shortages but can only do so much before they’re forced to raise prices or scale-back their business.
“The small business community reduced in size to the tune of hundreds of thousands over lockdowns. Businesses desperately need policymakers to act fast and help with the charges hitting them, or history is set to repeat itself. We’re looking to prime ministerial candidates for unequivocally pro-business, pro-growth commitments. There is still time to act to support those businesses that are the backbone of our nation’s economy, but time is of the essence and quickly running out.”
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