Confidence has plummeted among South West business owners following the emergence of Omicron, a new report by the Federation of Small Businesses (FSB) has found.
Fears of further Covid restrictions has also contributed to concerns, according to a poll of members carried out by the business group.
In the run-up to Christmas confidence levels fell nearly 30%, compared to the previous report in the autumn, with South West business leaders now the least optimistic in the UK, the FSB said.
The quarterly survey found a rise in nervousness among businesses over what would happen with Omicron, although the report suggested the easing of rules would help boost business sentiment.
The FSB's regional policy representative, Craig Carey-Clinch, said the results of the 2021 quarter four survey were a "stark reminder" of the difficulties many small businesses throughout the South West were facing.
“What we hope this report will do is to serve as a reminder to stakeholders in and outside of government that they must continue to support, incentivise and invest in our small business community," he said.
"The South West’s SMEs have had so many issues to deal with over the past two years and have fought on valiantly, but they can’t do it alone and we need help and understanding if we are to see those confidence levels rise once again.”
The report also revealed fears over future profit levels and concern over the current economic conditions in the UK for trading. The business leaders polled also said hiring appropriately skilled staff and reduced customer demand were also among the biggest barriers to growth.
However, nearly half of those polled said aspirations in the next 12 months were to grow "rapidly" or "moderately", and more businesses indicated plans to increase headcount (rather than decrease it).
FSB national chairman Mike Cherry is now urging the government "not to miss out" on the warnings revealed in the survey.
“Small business confidence dropped in every quarter of 2021. As we move into the New Year, the government needs to act now if we’re to reverse that trend and secure an economic bounce back," he added.
The South West report was part of a larger nationwide FSB survey for the same quarter which also revealed the vast majority of businesses – over three-quarters – said costs were rising.
The national report found confidence was lowest among the retail and accommodation and food sectors.
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