Small business confidence dips ahead of new customs controls coming into force
Four in 10 exporters have reported a fall in international sales since the end of the Brexit transition period, a major study has revealed.
The finding forms part of the Federation of Small Business’ (FSB) Small Business Index (SBI), which provides a summary of business performance for the third quarter of 2021.
According to the tracker, four in 10 – around 41 per cent of traders – have reported a “drop off” in international sales in the three months to September 2021 (up 10 per cent compared to the same period in 2019), while one in five exporters have either “permanently or temporarily halted” overseas sales as a result of supply chain disruption.
To make matters worse, four in five (79 per cent) exporters admit to not being “fully prepared” for the introduction of full customs controls coming into force on 01 January 2022.
The index also found that one in seven (14 per cent) small firms reduced staff numbers in the three months to September, while eight in 10 (82 per cent) had “no plans” to increase staff numbers in the three months leading up to Christmas.
It means that small business confidence has fallen by more than two percentage points since the second quarter of 2021, and almost nine points since the first quarter.
Commenting on the report, FSB National Chairman Mike Cherry said small business confidence “surged at the start of the year”, but that resurgence has now “run out of steam”.
“Too many small exporters – often our most innovative and profitable firms – are struggling to get across new paperwork and preparations for import checks,” he said.
“As such, policymakers should revamp and relaunch the SME Brexit Support Fund, widening the eligibility criteria, and making deadlines for applications more realistic.”
Click here to access the full study.
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