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Nearly half of the 1,029 firms interviewed, including 66% of retailers, predicted that their performance would worsen in the first three months of 2020. Just a quarter expected conditions to improve next year.
Companies reported that earnings were under pressure, with 42% saying profits had fallen – the highest reading in five years. Fewer than a quarter of exporters predicted a pick-up in sales in the next three months, which is the gloomiest reading since 2014.
This pessimism has a knock-on impact on hiring. Just one in 10 small firms expect to increase their headcount in the next quarter – another five-year low.
At -21.6, the FSB’s Small Business Index (SBI) is now at its lowest since 2011 when the UK officially slumped into a double-dip recession (although growth was later revised up).
Craig Beaumont, the FSB’s director of external affairs and advocacy, said the uncertainty since the 2016 EU referendum had hurt small firms, making it harder to plan ahead. He was particularly concerned by the decline in hiring plans. [...]