According to the confidence index compiled by the Federation of Small Businesses, Small business confidence has dropped to minus 9.3 during the months July through September 2011. The previous quarter had a reading of 0.3. The results of the survey have increased pressure on the government to give further assistance to small business, as growth slows.
The survey offers an indication of how businesses see their progress in the next quarter. As the government have placed the private sector firmly in the spotlight to boost the economy, calls are being made for more support as the government continue to try and reduce the public deficit by making drastic cuts to public spending.
The chancellor has announced a number of measures, including ‘credit easing’, although procedures have to be put in place. Forecasts for growth in the UK have been lowered by Ernst & Young Item Club and the Centre for Economics and Business Research to 0.9 and 0.6 percent respectively. The national chairman of FSB, John Walker isn’t surprised by the drop in confidence, as businesses are being hit by reduced revenue and increased costs. The survey first took place in 2010, and now is the first time that businesses have planned to reduce staff in that period.
The chancellor has been urged to reduce National Insurance Contributions for employers, which will encourage job creation and recruitment. The second quarter of 2011 saw growth of the economy measuring just 0.1 percent, while results for the third quarter will be revealed on 1st November.
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