Buoyant Christmas run-in as proportion of small businesses predicting closure hits record low

At a time when transport disruption, labour shortages and fears of a winter fuel crisis are prominent, small business confidence holds strong for the three months to Christmas.

Not only is there solid quarter-on-quarter consistency in the proportion of ventures predicting growth but new findings from our research also reveal that the percentage of small businesses fearing they could struggle to survive or collapse has hit its lowest level for two years. This rocketed when Covid first struck back in April 2020, with 29% of small businesses fearing they would close in the next three months. Whilst closure fears remained in double figures for the next three quarters, this month this has fallen to just 5%.

Small business growth predictions for the three months ahead:

A comparison over successive quarters (column percentages)

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2020

Q3 2020

Q2

2020

Significant expansion

5%

6%

6%

4%

4%

4%

4%

Organic / modest growth

29%

29%

30%

22%

23%

23%

10%

No change / stay the same

52%

49%

47%

45%

46%

43%

26%

Contract / scale down

9%

8%

9%

14%

15%

19%

31%

Struggle to survive

5%

8%

7%

13%

12%

11%

29%

Sector outlook: A winter’s tale

  • The lifting of Covid restrictions has allowed many enterprises to gear up for a busy Christmas period, with 35% predicting growth in the next 3 months – almost double the figure this time last year (18%).

  • Retail along with Travel & Distribution buck the trend, with fewer enterprises predicting growth compared to this time last year. These sectors have been seriously impacted by labour shortages and supply chain disruption.

  • Despite challenges in labour supply and post-Brexit uncertainty, outlook in Manufacturing for the Christmas period is relatively bullish. Growth predictions here have doubled compared to the all-time low this time last year (back from 23% to 49%)