Confidence levels among smaller firms in the South West have stalled, according to the Federation of Small Businesses (FSB).
The FSB said its latest quarterly survey of local business positivity showed confidence, which had seen an upsurge was "short-lived" and had dipped slightly.
The new figures – taken after FSB members and guests took part in the survey in the first week of July – showed concerns about the economic situation remain "very difficult" for many small business owners and the self-employed. SMEs cited a concern about the economic situation, sluggish consumer demand and rising costs.
However, despite the headline fall in confidence small business said they felt the situation would improve. Nearly half of those surveyed in the South West said their growth aspirations in the next 12 months were to grow "rapidly or moderately", with nearly one in five planning to increase headcount.
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FSB regional policy chair Craig Carey-Clinch said that although the headline figures were "disappointing" these signs are something to build on.
Mr Carey-Clinch said: “The reality is that business confidence – like the economy that influences it – is just in a totally uncertain place. All we can hope is that some of the positive signs we are seeing can be built on and increasing confidence can start to become the norm again rather than the exception.
“We at FSB will continue to work hard with leading policy makers to stress that small businesses can and will do their bit to try and get things moving forward again but they can’t do it alone. Pro-small business policies are essential to get SME confidence firmly back on track.”
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The regional figures were released as part of the overall national FSB confidence report for the quarter which saw a more dramatic fall in confidence than has been seen in the South West.
Martin McTague, FSB’s national chair, added: “Although the upturn in small firms’ confidence from the first quarter didn’t carry over into the second quarter of the year, the message from our research is that small firms’ confidence in the future is looking rosier,” he said.
“Given the right conditions for growth, small firms have the potential to power a groundswell of economic activity. With the domestic economy the biggest perceived barrier to growth, however, they are in something of a catch-22 situation.”
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