The proportion of small businesses predicting growth has almost doubled in just three months – from 14% to 27% – giving one of the first tangible indications that the easing of lockdown is having a positive impact on a key area of the economy.
The quarterly tracking study* conducted in the UK by Hitachi Capital Business Finance (now Novuna Business Cash Flow) examined the percentage of small businesses that actually predict growth in the next three months. Following last quarter’s report, which saw the percentage of small business owners predicting growth plummeting from 39% to just 14%, the new findings show the highest quarter-on-quarter rise in five years.
With 27% predicting growth overall, there were significant rises in the percentage of small businesses predicting moderate expansion over the next three months (up from 10% to 23%) or no change (26% to 43%). There is also a significant reduction in the percentage of businesses that fear contraction (down from 31% to 19%) or collapse in the next three months (down by almost two thirds from 29% to 11%).
The study found that within the construction sector 20% of small businesses owners predicted growth for the three months to 30th September, with this figure rising to 30% in the case of the manufacturing sector which had one of the highest rises in confidence since lockdown (up from 9% to 30%).
The research also suggests that smaller, more agile enterprises will be the fastest to adapt to the re-emergence from lockdown: Small businesses that had been trading for less than five years (35%) and those that employed 10-49 employees (37%) were most likely to predict business growth for the next three months (up to 30th September).
Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance commented: “The latest Hitachi Capital research findings are remarkable for both the scale and the speed of the revival in small business confidence. We knew last quarter that small business confidence would fall as lockdown started and the scale of the fall was a concern, particularly the steep rise in the number of business owners fearing for their survival. Our new research – just in – shows what an immediate and positive impact the easing of lockdown has had on the small business community.”
Novuna Business Cash Flow
*The research was conducted by YouGov among a representative sample of 1,140 small business decision makers on 15 July 2020 spanning industry sectors.