New research indicates a renewed sense of confidence among small businesses since the installation of the new government.
A study by Novuna Business Finance, surveying 1,000 small business owners and senior managers, reveals that 68% of enterprises are considering new projects to drive future growth. This marks an increase from the 66% reported at the start of the year.
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The findings coincide with 35% of UK small businesses forecasting growth for the next three months leading to 30 September, up from 30% in the previous quarter. This resurgence in confidence mirrors levels seen at the beginning of 2022 and suggests a growing number of enterprises are planning to invest in initiatives aimed at boosting growth in the final quarter of the year.
The research tracked the intentions of small businesses regarding new initiatives to help fulfil their potential and achieve growth. The increase in confidence was particularly driven by certain sectors. In the IT and telecoms sector, 77% of small businesses are considering growth initiatives, marking a four-year high. The manufacturing sector leads, with 81% of businesses planning new projects in the next three months, a 6% increase from Q1, maintaining the sector’s strong position over the last five years. Other notable sectors include construction (75%, a six-month high), media and marketing (75%, an 18-month high), and transport and distribution (69%, a six-month high).
Despite lingering challenges from the cost-of-living crisis and ongoing economic uncertainty, small business leaders are focusing on cost control as a key strategy for securing growth. Keeping fixed costs down remains the top priority for 52% of respondents, though this is a slight decrease from 56% at the start of the year. Other priorities include improving cash flow (33%) and enforcing stricter policies on late payments (24%). Additionally, 21% of respondents are focused on reducing headcount.
Investment in new equipment has also surged, reaching a four-year high of 23%, with the manufacturing and construction sectors leading at 27%. Furthermore, 22% of small businesses are planning to hire more staff, up from 20% earlier in the year. Hiring is particularly strong in Yorkshire and the Humber (26%), surpassing London and the East of England (both at 25%). The finance and accounting (36%), legal (39%), and IT and telecom sectors (33%) are leading this recruitment drive.
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By GlobalDataThe proportion of businesses aiming to expand into new and overseas markets has also risen, reaching 22%, the highest level in two and a half years. This trend is especially pronounced in the manufacturing sector (28%), significantly expanding businesses (43%), and those with high turnover (33% for businesses with a turnover of £10 million or more).
