Confidence creeping up for small firms in the north west

New research from the Federation of Small Businesses shows confidence is creeping up for small businesses in the north west.

According to the FSB’s Voice of Small Business index, firms in the region are displaying cautious optimism heading into the new year, compared to the same period in 2011.

Overall, the index in the north west rose by two points, from -5 in 2011 to -3. This compares favourably with small business confidence in London, which fell significantly from +2 to -12; in Scotland, which increased slightly from -11 to -10; and in the West Midlands, which remained stagnant at -6. Firms in the East Midlands recorded a score of +1, but this was down from +5 in 2011.

Regions with the same level of small business confidence as the north west were the south west (rising from -9 to -3) and Yorkshire (-4 to -3).

Areas with the lowest confidence levels overall also recorded the sharpest year-on-year increase. These were Northern Ireland (-65 to -49) and Wales (-25 to -16).

Small business confidence in the east of England went up from 0 in 2011 to +2, and in the south east the increase was from -2 to 0.

The north east recorded the strongest confidence levels, rising from +4 to +11 year-on-year.

Nationally, confidence in Q4 fell by 1.1 points against Q3 to record a score of -5.6, but it was 18.8 points higher than the same period last year, when the economy entered into double-dip recession.

Overall, fewer small firms applied for finance in Q4, but of those that did a higher proportion were accepted – 49.3%, up from 42.8% in Q3.

The FSB believes this is a move in the right direction, but in total fewer than one in 10 respondents consider credit to be easily available. The FSB wants to see the new business bank improve competition in the sector and promote alternative sources of finance, freeing more businesses to bring forward investment decisions.