Small business growth forecasts hit two-year high
Despite inflation rising to its highest level in 30 years - plus the impact of war in Ukraine on fuel prices - our new research suggests that we are beginning to see the bounce-back after Covid restrictions fell away in the UK earlier this year.
Latest figures for April from our quarterly tracking research reveal that 37% of small business owners predict growth for the next three months. This represents the highest figure since the pandemic started more than two-years ago. In addition, the percentage of small businesses predicting contraction has also hit a two-year low (falling to just 7%).
Significantly, the new data suggests that small businesses that had been most affected by the pandemic are those that now see the biggest return in confidence for the future. For example:
- Small business owners that had been forced to repurpose their enterprise during lockdown are now most likely to be those on the rise - with 41% of these business owners predicting growth for the next three months, a steep rise from 27% last quarter.
- Those enterprises that had been forced to close during lockdown are also now bouncing back, with the proportion predicting growth up to 28% (rising from 20% last quarter).
- In contrast, for businesses whose operating status was not impacted by Covid - or who continue to work from home - for these enterprises, growth forecasts remain unchanged on the previous quarter.
There is no question that many small businesses have been tangibly impacted by recent price rises, which directly impact the bottom line and supply chain. That said, it is important not to forget the seismic risks that enterprises had to cope with during the pandemic. Many had to close their doors, others had to fundamentally reinvent their business to survive - and we, at Novuna Business Finance helped many enterprises to adapt at this critical time. Those that experienced the most pain during lockdown are the small businesses that are forging ahead today. And it has taken six months since COVID restrictions fell away for us now to finally see the resilience of small businesses and their power to rebuild and recover.