Warning over north/south divide in SME confidence

A new study by the Federation of Small Businesses (FSB) has revealed that confidence among smaller firms varies greatly in different areas of the UK.

The research suggests that there is a growing gulf between businesses in the Midlands and the South of England and those in outlying areas such as Scotland, North East England and Wales.

The FSB said that while it was encouraging that the UK as a whole was seeing increased job creation and improving productivity, there was a worry that some regions could be left behind.

There have been a number of discussions about why firms in certain parts of the country are more likely to have seen their confidence drop off in the last couple of years and while it’s likely that there are a number of contributing factors, the FSB said that ministers now needed to look at how best to address the problem.

John Allan, the FSB’s national chairman, believes that the flooding which recently affected regions such as Yorkshire and Cumbria is likely to have exacerbated a pre-existing issue.

Despite the question of how best to bridge the divide, Mr Allan said that generally there were reasons to be optimistic about the ability of smaller companies to respond to challenges as and when they arise.

“Although confidence is patchy across the UK, small businesses continue to show they are resilient, leading the way on employment growth and productivity,” he said.

“Increased productivity and stable economic growth are helped by a low inflation environment. This increase is the sixth consecutive quarter of rising productivity. It is clear that small firms are improving their use of capital equipment, providing better staff training and finding new ways to be more efficient.”