News

April 05, 2013

Small business optimism takes a dive

Small firms are much gloomier than they were this time last year, according to the findings of a new poll conducted by BHP, publishers of the Donut websites, sponsored by the business software specialist, Sage.

In its survey of small businesses conducted last year – in February 2012 – almost half of respondents (48%) said they thought the economic outlook would be better than the previous year. This year, the number of optimists has fallen dramatically to just 34%.

The survey also reveals that 6% of firms plan to make redundancies – double the 3% who said the same in 2012. In addition, 22% are unsure about the prospect of redundancies, significantly more than the 10% who said they were unsure about laying off staff this time last year.

Spending on marketing has taken a hit as well. This year, just 32% said they planned to spend more on marketing – a big drop from the 51% that were planning to invest more in marketing in 2012.

Small firms continue to report that Government help is lacking. This year, a total of 72% of respondents said the Government will either not do enough or not do anything to support businesses in 2013. And, despite considerable Government publicity about the introduction of Real Time Information (RTI) for payroll, a worrying 48% of respondents are still unaware of RTI.

Rory MccGwire, BHP chief executive, said: "Our latest poll highlights the resilience of small businesses who continue to graft even as the economy is bouncing along the bottom and despite the widespread perception that Government support for them is insufficient. However, despite this resilience, it's clear that optimism has fallen significantly since 2012."

He added: "The question remains whether this increased gloom is realism on the part of small firms – with the threat of a triple-dip hanging over the UK economy – or perhaps a more damaging worn-out pessimism after five years of incredibly tough trading conditions."