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13 Nov

Invitation to Tender: ScaleUp360 Programme Workshops and Business Advice

A procurement opportunity has arisen for a bank of high growth business support specialists to supply 1-2-1 business advice and workshops to businesses and entrepreneurs in the Sheffield City Region (SCR).

11 Nov

Flood Support from Nottinghamshire County Council and Derbyshire County Council

Derbyshire and Nottinghamshire County Council have announced their support for residents and businesses affected by recent flooding. Both councils are offering emergency payments of up to £300 for small businesses who have been affected by the floods.

30 Oct

Workshops at flagship iHub Innovation Centre achieve full occupancy

The £12m iHub innovation centre on Infinity Park in Derby has scored another success after its state-of-the-art hybrid workshop achieved 100% occupancy.

East Midlands small firms top confidence table

The East Midlands reports a higher level of small business confidence than any other UK region in the latest Federation of Small Businesses (FSB) Small Business Index (SBI).

FSM - map
The index, which reflects expected performance for the next three months, stands at 39 in the East Midlands in Q1 2017, the highest reading for any region this quarter.

The recovery has been spurred by increased international trade. The vast majority (82%) of exporters surveyed in the region state that international sales have been steady or increased in Q1. Almost all (95%) expect this trend to continue over the coming three months.

The recovery in confidence comes despite a surge in the cost of doing business. More than three quarters (78%) of small firms across the region report a rise in operating costs over the past quarter.

However, the region’s firms remain optimistic about hiring new staff. Almost nine out of ten (87%) small firms in the East Midlands expect to maintain or increase their headcount over the next quarter.

Natalie Gasson, FSB Development Manager, said:

“It’s hugely encouraging to see small businesses in the East Midlands are topping our confidence tables and its great news that more and more businesses are trading overseas, driving an exports-led recovery. We know that small firms that export have higher turnovers than those who rely on the domestic market, so it’s crucial that the Government maximises cross-border trade opportunities for small firms.

“That includes negotiating an ambitious free trade agreement (FTA) with the EU as part of the Brexit process. The FTA must include a dedicated small business chapter and ensure the easiest possible access to the single market. Our latest Brexit research finds that over a quarter of FSB exporters would be deterred from trading with the EU27 by a tariff of any size. We cannot rely in the long-term on the boost that exporters have received from a weak pound. To maintain export growth, we need to focus on opening up new international markets and getting more small firms exporting.”

The recovery in the headline SBI comes despite a surge in the cost of doing business. A net balance of 64.5% of small firms report an increase in operating costs over the past quarter, the highest proportion since the summer of 2013. Fuel (36.8%) and labour (35.9%) are cited most often as the main causes of this increase, with the exchange rate (26.9%) also frequently flagged.

The average FSB employer will face £2,600 in additional employment costs over the coming year as a result of the rise in the National Living Wage, resulting National Insurance contributions and auto-enrolment. These cost pressures are being exacerbated by rising inflation. The Consumer Price Index (CPI) rose above the Bank of England’s 2% target to 2.3% in March. Firms are struggling with increased prices when buying supplies, products and services, but the rise in inflation will also impact other bills, such as business rates.

Natalie Gasson continued:

“At a time of unprecedented political and economic uncertainty, small firms are being hit from all sides by mounting cost pressures. This month alone many have had to absorb a hike in business rates and the National Living Wage. Added to this are costs that have steadily risen, such as fuel, which our members are increasingly pointing to as a major cause of higher outgoings.

“The impacts of the spiralling cost of doing business are starting to show. The percentage of businesses seeking to grow in the next twelve months, although slightly up on last quarter, remains below the levels seen two or three years ago. Higher numbers of businesses also report they plan to downsize or close over the next year.”

Small firms are more positive about their ability to access finance. A record number of SBI respondents (74.5%) were successful in their applications for credit in Q1. In addition, the balance of small firms describing the affordability of new credit as good has risen (29.1%).

The net balance of small businesses intending to increase employment over the next three months is also up, to a near two-year high of 11.3%. However, the balance of small firms reporting higher headcount for the last quarter has fallen from 2.9% in Q4 to 2.1% in Q1.

The SBI now stands in positive territory across most UK regions. Scotland is the exception, having posted negative confidence for five straight quarters, though its Q1 figure (-10) is the highest since Q2 2016. The East Midlands reports the highest confidence levels for this quarter (39.3) while London has rebounded from -1.7 in Q4 to 24.5 in Q1.

Natalie Gasson added:

“Small firms are telling us loud and clear that they want to keep hiring. One fifth of our small businesses with staff employ non-UK EU citizens so guaranteeing the rights of EU workers based here should be a top priority for Brexit negotiators. On the domestic front, an increase in the Employment Allowance must be a key consideration for the Autumn Budget.”

To request a copy of the Q1 2017 SBI please contact Natalie Gasson. The Q2 2017 SBI will be published in June.