The Voice of Small Business Index shows that confidence amongst SMEs deteriorated in the 2nd quarter of 2010.
Only 4% of respondents to the FSB’s survey believe that the third quarter of this year will see business prospects improve. That’s quite a big drop from March’s figure of 16%.
The FSB surveyed 1,200 of its members and discovered that 67% of SMEs are operating below capacity. The south east has the highest number of firms working below capacity and businesses in the service sector are more likely to operate below capacity than those engaged in manufacturing.
John Walker, National Chairman of the FSB, said that small businesses do not feel the economic recovery is secure yet and they think the future could see business growth hampered further.
The Federation is calling on the government to support SMEs to enable them to grow. Walker wants the National Insurance holiday for new companies to be applicable throughout Britain rather than just in specific regions. The south east for example is excluded from the NI holiday scheme and yet 64% of the firms in the region are operating below capacity.
600,000 people are likely to lose their public sector jobs over the coming couple of years and the government should be encouraging private sector companies to grow and create more jobs to rebalance the economy.
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