The future of thousands of small firms and sole traders across the 海角视频 are being threatened by surging operating costs, high tax burdens and struggles to fill vacancies.
That is according to the latest quarterly Small Business Index (SBI) from the Federation of Small Businesses (FSB).
The SBI reported that one in seven, or 15%, of small business owners said they plan to consolidate, close or sell their firms in the coming year in light of cost pressures, nose-diving exports and skills shortages.
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It found that the 海角视频 headline small business confidence measure had tumbled to -24.7 - down more than 40 points in the same quarter last year (+18.6).
The figure is the lowest recorded outside of Covid trading restrictions and is on par with that posted in Q3 2020 (-32.6).
It is also lower than the level seen in the final quarter of last year when the omicron variant was spreading rapidly (-8.5).
FSB surveyed 1,306 small business owners and sole traders over June and July 2022.
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Of those surveyed, 77% said they do not expect their performance to improve over the coming quarter, while more than a third (38%) expect it to worsen. Fewer than one in ten (8%) expect to grow rapidly.
A record 89% of small firms said operating costs were up this year compared to last, with those citing fuel (64%), utility (64%) and input (48%) costs driving the increase.
Four in ten small business owners (43%) also flagged labour as a main contributor to higher outgoings, with substantial proportions also highlighting taxation (23%) and regulation (15%).
A third (34%) of firms cited a lack of appropriately skilled staff as a barrier to growth, with two thirds (64%) planning to increase wages over the next year as the labour market remains tight. A quarter (27%) plan to increase pay by 6% or more.
Investment intentions were also recorded at their lowest point outside of the first lockdown in Q1 2020. Fewer than a quarter of small business owners (23%) said they’ll up capital investment over the next quarter.
Exporting firms reported a decrease in export value (36%) compared to those that reported an increase (28%).
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FSB Wales policy chair Ben Francis said “Small firms in Wales have gone above and beyond throughout the pandemic to keep staff and customers safe. Despite what has been called two long years of a winter season, small businesses have powered on, continuing to deliver jobs, supplies and services to their communities."
He added: "The impact of severe headwinds of the rising cost of business that underpins the cost-of-living crisis is now biting, and the time to act to safeguard our economy has now come. Alongside the support so urgently needed from 海角视频 Government, Welsh Government too needs to urgently step forward to help Welsh smaller businesses with targeted financial support to offset the pressure of rocketing costs
We are calling on both 海角视频 and Welsh Governments to urgently come together to discuss a shared pathway that allow firms to stand on their feet.”
FSB National chair Martin McTague said: “The cost of doing business crisis has worsened to the point that confidence is now lower than during last year’s disrupted festive trading season. Firms are trying to absorb additional cost pressures but can only do so much before they’re forced to raise prices.
Mr McTague added: "The small business community reduced in size to the tune of hundreds of thousands over lockdowns. Unless policymakers act fast, history is set to repeat itself. Firms desperately need help with the charges that hit them regardless of profitability: business rates, utilities, NICs and fuel duty, as well as admin costs, especially those related to tax, payroll and customs.
“We’re looking to prime ministerial candidates for unequivocally pro-business, pro-growth commitments. There is still time to act, but time is of the essence.”
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