New record low for small business confidence in South West
Our region's got the lowest positivity in the country
Small business confidence levels in the South West ended 2022 at a new record low.
That's the findings of the Federation of Small Businesses' confidence report which showed our region was the least confident area in the UK.
The stats, for the period October-December, showed that fears of inflation, falling consumer demand and the general cost of doing business left confidence levels at a net level of -62 compared to just -1 at the start of the year.
Greatest Hits Radio spoke to Ruth Lambert from the Federation of Small Businesses South West. She says the figures may be due to the sheer amount of small businesses in the area:
"We asked people what the main issues were that were affecting their business and people were saying it was the current economic crisis, lack of consumer demand and utility costs - so no big surprises."
In addition to the overall confidence figures, the report also revealed a continued decline in revenue among the small businesses surveyed, an increase in the amount of businesses shedding staff and growing pessimism about trading conditions in the immediate future.
Only a modest increase in the number of businesses planning to invest in the coming months provided any real positivity in the findings.
FSB South West regional policy representative, Craig Carey-Clinch, said the report summed up the sentiment many businesses felt about 2022 – a year that began with optimism but rapidly went down.
“It all began with a renewed sense of hope as we looked to have Covid behind us but then it all got gradually worse as domestic and international events combined to wreck hopes, ambitions and small business’ finances,” he said.
Looking ahead, Mr Carey-Clinch said he hoped 2023 would see a reversal in small business fortunes but he called on the powers that be to play their part to make that happen.
“We can only hope that we have now reached the bottom of this cycle and 2023 can start to slowly but surely change the narrative.
“Small businesses and the self-employed here in the South West will do everything they can to try to change things but, as ever, we can’t do it alone.
“We need sympathetic, innovative and supportive people at the heart of Government to put business first and help us keep our great local businesses and entrepreneurs on track to begin the economic fight back we all crave.”
High streets and shopping centres vacancy rate improves
However, newly released figures from the British Retail Consortium (BRC) and Local Data Company (LDC) Vacancy Monitor says there were fewer empty stores last year - particularly in the second half - as international tourist visits increased and the return to the office picked up.
Figures show the overall vacancy rate improved to 13.8% in the fourth quarter of 2022 - 0.1 percentage points better than the previous quarter and 0.6 points up on the same period a year earlier.
Shopping centres saw a quarterly improvement to 18.2%, down from 18.8%, while high street vacancies improved to 13.8% from 13.9% and retail parks enjoyed a 0.7 percentage point reduction in empty stores.
Greater London, the South East and East of England had the lowest vacancy rates, while the highest were in the North East, followed by Wales and the West Midlands.
BRC chief executive Helen Dickinson said:
"Retail occupancy was boosted by the return of international tourists visiting UK towns and cities and more frequent visits to offices.
"These trends have given many retailers the confidence to invest in repurposing and reopening empty units.
"The first half of 2023 will likely be yet another challenging time for retailers and their customers. There are few signs that retailers' input costs will ease, putting further pressure on margins, and making businesses think twice on how much investment to make.
"However, the situation should improve in the second half of the year, as inflationary pressures begin to ease and consumer confidence is expected to return."
LDC commercial director Lucy Stainton said:
"With vacancy rates being such a good barometer of the overall health of the physical retail and leisure landscape, it's really positive to see the number of empty units at a Great Britain level continuing to fall since they peaked mid-pandemic.
"Retail parks continue to outperform other location types which is perhaps an indication that some of those shopping habits formed during the height of Covid are sticking - with consumers favouring these drive-to locations and larger format units."