Small British business owners are experiencing a significant decline in confidence due to rising costs and falling revenues, according to the Federation of Small Businesses.
Concerns about an impending recession have further exacerbated their pessimistic outlook. The latest survey shows that overall net confidence dropped to its lowest level since the depths of the pandemic, reaching -35.9 in the three months to the end of September.
Almost half of the respondents reported a decrease in revenues during the third quarter, with over 40% expecting further declines in the next quarter.
Continued inflation has seen rising costs, particularly energy and wage bills, affecting the majority of small firms.
Many businesses are relying on debt to survive, with an increase in finance applications over the past three months. The tech sector is also experiencing a downturn in business confidence, with only 12% of surveyed companies expecting improvement in the next 12 months. Rising wage bills, energy costs, and concerns over talent access are among the key challenges faced by the sector, leading to increased prices through 2023.
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