Business

Record number of small businesses planning to downsize or close

Mature craftsman using spirit level in pipe organ workshop
Gareth McKeown

A RECORD number of small businesses are planning to downsize, close or sell up due to factors including Brexit , according to the Federation of Small Businesses (FSB) index.

The latest research shows that small business confidence stands at +1 in the third quarter of 2017, down from +15 in the second quarter, and close to the -3 seen immediately after last summer's Brexit vote.

The new index has further revealed that the majority (70 per cent) of small firms have reported a rise in operating costs compared to the same period last year, while one in eight small businesses (13 per cent) now expect to downsize, hand on or close their business. This figure is at its highest since the SBI launched in 2012.

FSB Northern Ireland policy chairman Wilfred Mitchell said the latest figures are "highly disturbing".

“Increasing inflationary pressure and a weakening domestic economy are identified as the twin drivers of plummeting confidence amongst small businesses and consumers alike throughout the UK. In Northern Ireland political instability remains a key concern for our members."

Exporting small firms remain optimistic about their prospects, with the proportion reporting an increase in overseas sales at a three-year high (39 per cent) and a similar proportion (35 per cent) expectant that export growth will continue over the coming quarter.

The net balance of firms reporting higher revenues has hit a four-year low and the proportion applying for credit is at its lowest since 2014. Less than a third of small firms expect to increase investment in the next three months (27 per cent), a five percentage point drop compared to the last quarter.

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