Just one in six of Britain’s small businesses expects to grow over the next 12 months, the lowest proportion since records began in 2014, while nearly one in three anticipate shrinking, selling up or closing their doors for good.
The findings, from the Federation of Small Businesses’ quarterly Small Business Index, lay bare the scale of the challenge facing Andy Burnham as he prepares to enter Downing Street on Monday. The lobby group warned the incoming prime minister faces a “huge test” to turn the economy around.
The gap between firms predicting growth and those predicting shrinkage, a sale or closure is now the widest the FSB has recorded. The net balance first turned negative a year ago and has stayed below zero ever since.
For the owners behind the numbers, the culprits are familiar. The survey of 1,113 small business owners and sole traders, conducted in June, found the state of the UK economy, taxes and labour costs were expected to act as the biggest drags on growth over the coming year.
Tina McKenzie, the FSB’s policy chairwoman, said: “We cannot and must not accept a ‘new normal’ where more small firms believe they will shrink, sell up, or close entirely than anticipate growing over the next year. Small firms are the only engine of growth present in each and every postcode and we need them firing on all cylinders.”
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