Small business confidence has slumped in every region of England apart from Andy Burnham’s north west heartland.
The percentage of small business owners predicting growth across the country has slumped to 24%, its lowest for 12 years with particularly sharp downturns in the construction, retail and hospitality sectors.
The findings underline the scale of the economic challenge facing the former Manchester mayor who entered Downing Street last week after becoming Prime Minister.
The 56-year-old Labour MP for Makerfield in Greater Manchester has pledged to run a pro-business administration.
There was no sign yet of a “Burnham bounce” in polling from Novuna Business Finance which surveyed 1000 small enterprises between the 5th and 8th of July. ahead of Mr Burnham entering office.
At a time when the country will have a new “Number 10 North” the north west is the only region where there was a quarter-on-quarter rise in growth forecasts.
It went up from 26% in the second quarter to 28% for the third quarter.
Everywhere else in England, the percentage of small businesses predicting growth for the next three months has dipped to a 24%.
The most dramatic drop was in the south east, where it fell from 21% to 16%, and the south west, down from 22% to 15%. London, historically the engine room of small business growth, saw a slightly more robust performance with 36% predicting expansion, but this was still a 12 month low.
The “expected growth” score in the capital has slumped from 48% a year ago and 40% at the start of the year.
Small business confidence across England peaked at 35% in the April to July quarter two years ago amid optimism about the impact of a pro-growth Labour administration led by Starmer and Rachel Reeves.
However, the reading fell over the next four quarters as business lost faith in the new government amid tax hikes and anaemic growth.
Following a slight rally in the last quarter confidence is again on the slide against a backdrop of turmoil in the Middle East and a new spike in energy costs. Ever more worrying the latest figures represent the first time since the UK went into Covid lockdown in 2020 that the percentage of small businesses contracting or struggling to survive (24%) is at the same level as those predicting growth (24%).
Jo Morris, Head of Insight at Novuna Business Finance said: “The context of geo-political tensions, rising fuel prices and political uncertainty following the local elections have probably all played out when it comes to small business planning. The one thing small businesses don’t like is uncertainty.”
