Small firms see their confidence rise as GDP growth heralds end of recession

Momentum gained in first quarter of 2024 in terms of growth is mirrored by small business confidence levels, and must be built on.

Responding to Office for National Statistics figures showing that GDP rose by 0.6% in Q1 2024, and by 0.4% in the month of March, Martin McTague, National Chair of the Federation of Small Businesses (FSB) said:

“The rise in GDP across Q1 brings the recession from the end of last year to a mercifully swift end, and comes alongside a notable rise in small business sentiment over the first three months of this year.

“Our latest Small Business Index report for Q1 found that small firms’ overall confidence level rose into lightly positive territory after six straight quarters below zero, raising hopes that this year will be a brighter one for small business performance than the recent past.

“The month of March’s growth figure of 0.4% builds on the 0.3% and 0.2% recorded in January and February respectively. With twice as many small firms anticipating revenue growth in Q2 as bracing for a drop in sales, according to our research, we hope that this trend persists.

"The strong contribution to growth made by the production sector across Q1 can be seen in our research, with manufacturing being the most confident of the major sectors in the same period. Hospitality was the most negative major sector in terms of confidence, our report found, although it made a huge recovery in outlook when compared with the final quarter of 2023.

“Three successive months of growth is good news – the challenge now is to build on this momentum. Small firms will be listening carefully to political parties of all stripes as they set out their stalls, and measures which will lift their growth prospects will be especially welcome.”

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