July 2005 - UK Small Business Economic Confidence Survey
The Bank of Scotland Business Banking’s quarterly small business economic confidence survey has revealed soaring optimism amongst the country’s owner-managers in their own businesses.
Friday, 29 July 2005
• 82% of owner-managers believe their business will be better off or remain the same in the next 12 months.
• A quarter of owner-managers intend to invest more and recruit additional staff in the next 12 months.
An almost unprecedented four-fifths (82%) of owner-managers believe the performance of their business will be better or stay the same in the next 12 months – a rise of 19% since March.
The Bank of Scotland Business Banking survey reveals that whilst almost three-fifths (59%) of small businesses remain confident in the UK economy, net optimism has fallen by 12% since March. Just over a third (36%) of owner-managers believe general economic conditions will be “worse” in the next 12 months.
Despite rising business confidence there has been a decrease in the number of businesses expecting to invest more in their business this year. While 29% of small businesses expect to increase investment over the next 12 months - a fall of 22% since March. While 16% plan to invest less in their business, conversely, 14% of small businesses plan to increase their investment by over 10% in the next 12 months.
Similarly, increasing staff numbers is part of the business plan for almost a quarter (23%) of small businesses over the next 12 months. While this is a reduction of 21% since March, just 5% of owner-managers believe they will employ fewer staff in the next 12 months.
Despite growing optimism, owner-managers clearly feel they are having to work very hard to achieve their success. An unprecedented number of owner-manager state business life is getting tougher. Over half (58%) of small businesses claim it has become more difficult to run their businesses over the last five years – over a quarter (26%) of all businesses surveyed said it had become much more difficult.
Kevin Gillett, Head of Bank of Scotland Business Banking, commented: “The overwhelming confidence amongst small business owner-managers in the future performance of their business is greatly encouraging. Whilst a third of small businesses may be less confident about future general economic conditions, the fact that the engine room of the economy is still recruiting, investing and performing well paints a strong picture.”
Notes to Editors:
• Bank of Scotland Business Banking, part of HBOS Plc, provides a full range of products and services for small businesses with a turnover of up to £1 million pa.
• Having doubled its market share in the SME banking sector just two years after Bank of Scotland’s merger with the Halifax, Bank of Scotland Business Banking last year grew its small business deposit balances by 21%.
• Bank of Scotland was the first major bank to offer interest on business current accounts and offers the Best Buy Current Account Interest Rate of any High Street Bank (Business Moneyfacts March 2005. Best Buy applies to balances of up to £50,000). Over a third of all Scottish SMEs bank with Bank of Scotland.
• Bank of Scotland Business Banking is rapidly expanding its presence in England and Wales and all 700 Halifax branches now provide Business Banking facilities. The 100 largest branches in England and Wales also have a Business Banking Manager.
• The Opinion Research Business interviewed a total of 503 owners and managers of small businesses throughout England, Scotland and Wales in July 2005. Interviews were conducted on the telephone and the statistical margin of error in the data +3.4%.
Further information, journalists should contact:
Barry Gardner Bank of Scotland
Tel: 0131 243 7194 / 07900 227292
Email: barrygardner@hbosplc.com
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For more information from ORB please contact Allan Hyde on 0207 611 5272 or email allanh@opinion.co.uk
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