The team at Commercial Domestic Investigations always have their finger on the pulse of UK SME news.

This week we were surprised to learn of a gap in confidence that is growing between businesses in Scotland, north east England and Wales and those in the south of England.

In its latest Small Business Index (SBI) the Federation of Small Business (FSB) has examined business confidence among the UK’s SMEs during Q4 2015.

The FSB has also revealed that although job creation, increasing revenues and improving productivity is good news on a whole, firms in north east England, Scotland and Wales risk being left behind.

Over the last year, SMEs reported a year-on-year confidence decline in the north east, Yorkshire and Scotland, as well as in Wales.

North of the border in Scotland, confidence is at its lowest since Q1 2013. In other areas, levels remain stable, in large part due to technology firms and business/professional services.

Not All Doom and Gloom

However, overall UK confidence stands at 21.7 points, which is actually an increase of 4.1 points compared with the same period in 2014.

More than half (59 per cent) of businesses expect growth this year, and almost a quarter (24 per cent) reported a growth in revenue in the previous three months – the highest since 2010.

Another area of improvement was productivity – in Q4 2015 it hit 3 per cent, this has doubled in the previous year to reach an all-time high.

SMEs lead the way on job creation, reporting that they expanded their staff since Q3 2015, and more are planning to do so in spring.

On the other hand, spare capacity is at its lowest since reporting began, suggesting small firms expect a rise in interest rates later this year. Nearly one in four (22 per cent) report tax burdens as the biggest barrier to growing their business, up from one in six (16 per cent) 12 months before.

Commercial Domestic Investigations

59 per cent of businesses expect growth this year

Concerns

FSB national chairman, John Allan, commented that picking up the pieces from the recent flooding is “likely to further weigh on business confidence in the north”, while factors such as the impending National Living Wage, pension auto-enrolment, and proposed mandatory quarterly tax reporting are a concern for SMEs across the country.

He said: “A clear divide in confidence is now emerging across different parts of the UK, with businesses in the south and in sectors like technology and professional services feeling more positive about 2016.

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

“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.”

He added that ministers should be “sensitive to the cumulative impact of challenges that small businesses now face”.

About Commercial Domestic Investigations

Commercial Domestic Investigations are regarded within the debt collection and credit control industry as one of the best credit management companies in the UK. Established in 1988 to support and service all sizes of companies in the field of Credit Management.

Commercial Domestic Investigations have recently featured in the press in The Guardian. To keep up to date with the latest debt collection news make sure to follow Commercial Domestic Investigations on Twitter and LinkedIn.

We now boast a national client base in excess of 30,000 companies. Commercial Domestic Investigations has grown by listening to clients’ requirements and adapting our services to meet all companies’ needs from Sole Traders, SMES, Ltd and Plus. Please contact us on 08444 159200 for more information.