Small business confidence has dropped to its lowest point since the aftermath of the financial crisis, a new survey has revealed.
The study, published by the Federation of Small Businesses (FSB), found that the quarterly Small Business Index (SBI) stands at -9.9, the lowest observed since 2011.
The FSB, which represents around 160,000 members, said the figure indicates a level of pessimism lower than in the wake of the EU referendum (-2.9).
The reading is based on the outlook of businesses over the coming year. According to the report, more than four in 10 (43 per cent) small businesses expect their performance to worsen over the coming three months, compared to 30 per cent in the summer.
Likewise, the proportion of small exporters expecting international sales to fall next quarter has jumped to a four-year high, exceeding 30 per cent for the first time in that period and 14 per cent higher compared to the same period last year.
The number of small firms citing lack of access to appropriately skilled staff as a barrier to growth has also soared to 36 per cent.
The survey also shows a lack of confidence in growth, with more than two-thirds (67 per cent) of small businesses not expecting to increase capital investment over the coming three months, while 15 per cent plan to actively decrease investment.
FSB National Chairman Mike Cherry said the figures reflect a politically and economically uncertain business environment.
“We’ve not seen political uncertainty weighing on small business confidence like this for many years. Planning ahead has now become impossible for a lot of firms as we simply don’t know what environment we’ll be faced with in little more than 100 days’ time,” he said.
“A pro-business Brexit is one that ensures we can trade easily with the EU and have access to the skills we need. The latter is already proving a challenge and – if we crash out of the EU on 29 March without a deal – the former will go out the window.”
Mr Cherry added: “As things stand, Brexit is absorbing all of the UK’s political bandwidth. Once resolved, we must get back to issues on the domestic agenda: a late payment crisis that destroys 50,000 firms a year, an outdated business rates system and spiralling employment costs.”