With costs mounting, small businesses in London are continuing to battle the elements in latest LSBI Quarterly report.
The FSB London Small Business Index (LSBI), which measures confidence among businesses, has risen strongly since the last quarter.
It currently stands at +43 per cent. In Q4 2021, the reading was -5, while in Q3 it stood at +38.
This may potentially be reflective of a return towards ‘normal’ after the uncertainty associated with the new Omicron variant seen in Q4 2021.
Key headlines of the report are:
Reported revenue shows signs of a continued recovery since Q3 2020, following a sharp decline during the pandemic.
Almost one in five small businesses in the region have gained staff in Q1 2022, leading to a larger net increase in employment than in Q4 2021.
Investment intentions going into the next quarter remain positive but have declined since the previous quarter, sitting just behind the UK average.
In London, the general economic conditions in the UK (61 per cent), appropriately skilled staff (31 per cent) as well as consumer demand and foreign economy (both at 25 per cent) are the greatest perceived barriers to growth over the coming twelve months.
Across the country, firms in the accommodation and food sector, which have benefitted from relaxed travel rules and, are among the most bullish this quarter, as are those engaged in information and communication activities, many of which adapted fast to hybrid working.
By contrast, manufacturing and wholesale and retail firms report negative readings as surging operating costs, supply chain disruption, labour shortages and consumer belt-tightening weigh on expansion plans.
FSB London are calling for:
A co-financed business/mayoral apprenticeship grant for micro businesses taking on new apprentices.
Make audit committees directly responsibility for supply chain practice, elevating the importance of prompt payment within corporate environmental, social and governance (ESG) programmes, and place ending the UK’s late payment culture.
A new, ambitious alternative to the New Enterprise Allowance to help those with mental health conditions who are out of work to create start-ups.
We have had elections take place across all London Boroughs and we urge the new executive teams to hear small businesses calls for a Local Leadership Partnership pledge to:
• Work with FSB to develop supportive policy for small business in authority areas – particularly around procurement and payment terms
• Establish a culture of parity of focus between residents and small businesses
• Create (or continue in the next term) the post of a small business Champion (elected member) and Single Point of Contact (officer) within the Councils.
Rowena Howie, FSB London Policy chairwoman, said: “At this time of mounting uncertainty across the domestic and international stage it is heartening to see London’s small businesses showing an increase in sentiment and confidence levels.
“We must continue to support small businesses with targeted support for them to increase headcount in their business – so a Mayoral-led apprenticeship grant for micro businesses would be well received.
“We must also support our businesses by paying London businesses on time, every time. Late payments remains a scourge of our great city and small business owners are the ones who take the mental strain of this scandalous practice – it simply must be eradicated.”
The FSB SBI survey of 87 London businesses (1,200 UK wide for the SBI) took place over the last week of March and first week of April.