Revealed – the small businesses most affected by the energy price crisis -as research reveals six-year peak in number of small businesses citing barriers holding back growth

The percentage of UK small businesses citing barriers holding their business back from growing has hit a six-year peak (84%), with the impact of overseas conflict on energy and fuel prices in the UK now a serious concern for one in three enterprises (32%).

The findings from Novuna Business Finance show that current geo-political uncertainty is dominating the disruption felt by small business owners this spring, proving to be far more significant than local or immediate market challenges. The most significant barriers to growth cited included: macro-economic uncertainty (51%), rising oil prices (32%) and, as a consequence of this, the impact on higher running costs (31%). In contrast, the cost of skilled labour (20%), volatile cashflow (17%), fluctuating exchange rates (7%), digital proficiency (6%) and having out-dated equipment (5%) emerged as relatively smaller concerns.

Who’s being held back the most by rising energy and fuel prices in the UK?

Around the UK, small business in geographical extremes were far more likely to be impacted by rising energy price rises. Business owners in Scotland (40%), Wales (38%) and the South West of England (42%) were significantly more likely than the national average (32%) to say the impact of overseas conflicts on energy and fuel prices in the UK were a barrier holding their business back from growing.

By industry sector, small businesses in Transport, Retail and Manufacturing were most likely to say that rising energy and fuel prices were material barriers holding back business growth.

• Transport & distribution -58%

• Retail - 45%

• Manufacturing - 41%

• Hospitality - 36%

• Construction - 35%

• Agriculture - 35%

The general picture beyond oil

The research findings are from the Business Barometer study by Novuna Business Finance, which has been tracking small business growth outlook for more than a decade. The long-term picture suggests the percentage of enterprises experiencing barriers to growth has been slowly rising in recent years, but the new norm is at a higher level than the years before the pandemic in 2020.

• This Quarter, small businesses in the Manufacturing (94%), Retail (95%) and Transport/Distribution (90%) sectors are most likely to cite one or more barriers holding back planned business growth

• In Agriculture, the percentage of small businesses bemoaning barriers to growth has hit a four-year peak (86%)

• In Construction, Retail and Media, growth barriers are at their highest level since 2020

• Across six UK regions, there has been a year-on-year rise on the percentage of small businesses citing factors holding back growth – and in London, growth barriers hit a six-year peak (88%)