Small businesses bask in recovery as confidence surges to 25-year high
CBI boost for Vince Cable ahead of visit to Russia to launch $50m export fund
Monday 11 November 2013
Confidence levels among small businesses is rising at the fastest pace in 25 years, in the clearest sign that the economic recovery is not just helping the country’s biggest firms, according to the Confederation of British Industry.
The boost in confidence comes as Business Secretary Vince Cable arrived in Russia on a trade mission to increase exports to the country as part of the Government’s plans to lift exports to £1trn by 2020.
In the three months to October, the CBI found that optimism among small companies in the sector rose to 35 in the quarter, up from 9 in the three months to July – the fastest rise since records started in 1988. This time last year the index was as low as -12.
The business lobby group also found that the number of firms willing to spend more on buildings was up 5 per cent, while 11 per cent more wanted to invest in plants and machinery. Around 15 per cent more SMEs believe output will rise in the next three months.
Stephen Gifford, the CBI director of economics explained: “Optimism about the general business situation has improved and is now at a record high, and there is evidence of a general thaw in investment intentions for the year ahead.”
The confidence was driven by domestic orders from manufacturers, which rose at their fastest rates since January 1995, and follows on from the Office for National Statistics’ data which found that GDP grew 0.8 per cent between July and September. Manufacturing grew 0.9 per cent and construction by 2.5 per cent
Meanwhile, a survey by Barclays of 500 small firms also suggests many have more scope to boost their exports than they realise. It found that four in five small firms that had expanded overseas found the experience as they hoped or easier than they expected.
Almost half said that they wish they had started exported sooner and that what had been holding them back was a psychological, rather than a practical, barrier.
The positive trends come as Vince Cable took 31 small businesses with him to Russia where he will reveal that exports of goods and services to Russia have grown by more than 75 per cent from £4.3bn to £7.6bn.
Russia is the fourth largest export market for the UK, after the US, China and EU.
During the trip he will launch a new $50m (£31m) fund to help small businesses export to Russia after the CBI found that total UK export orders rose at their fastest rate since April 2011.
He said: “British small and medium sized businesses are the lifeblood of our economy. Many are doing incredible things and selling their services and products abroad. But too many do not realise their global potential.
“Unlike China or India, Russia does not manufacture a great deal, so there are real opportunities for UK firms to export there, particularly with the upcoming Winter Olympics in Sochi next year and the 2018 World Cup.”
However, despite the registered improvement in sentiment picked up by the CBI, most small firms are still not securing lending from banks.
According to the most recent Bank of England figures, lending to SMEs fell by another £400m in September.
Culinary experts in The Netherlands thought it was 'fresh' and 'tasty'
- 1 Marijuana use by teenagers does not result in a lower IQ or worse exam results, study finds
- 2 Watch what happened when food critics were unknowingly served McDonald's
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 NHS staff banned from drinking tea or coffee on the job because it looks like they're not working hard enough
Renee Zellweger on plastic surgery: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
Kim Jong-un 'purge': Six North Korea officials missing for weeks 'may have been executed'
Diwali: What is the festival of lights – and how is it celebrated around the world?
Nathan Cirillo: Final pictures emerge of soldier moments before he was shot dead by Ottowa gunman
Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
iJobs Money & Business
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
120-150k: Accountancy Action: We are looking for an experienced CFO from a min...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...