The percentage of UK small businesses citing barriers holding their business back from growing has hit a six-year peak (84%), with the impact of overseas conflict on energy and fuel prices in the UK now a serious concern for one in three enterprises (32%).
The findings from Novuna Business Finance show that current geo-political uncertainty is dominating the disruption felt by small business owners this spring, proving to be far more significant than local or immediate market challenges. The most significant barriers to growth cited included: macro-economic uncertainty (51%), rising oil prices (32%) and, as a consequence of this, the impact on higher running costs (31%). In contrast, the cost of skilled labour (20%), volatile cashflow (17%), fluctuating exchange rates (7%), digital proficiency (6%) and having out-dated equipment (5%) emerged as relatively smaller concerns.
Who’s being held back the most by rising energy and fuel prices in the UK?
Around the UK, small business in geographical extremes were far more likely to be impacted by rising energy price rises. Business owners in Scotland (40%), Wales (38%) and the South West of England (42%) were significantly more likely than the national average (32%) to say the impact of overseas conflicts on energy and fuel prices in the UK were a barrier holding their business back from growing.
By industry sector, small businesses in Transport, Retail and Manufacturing were most likely to say that rising energy and fuel prices were material barriers holding back business growth.
· Transport & distribution -58%
· Retail – 45%
· Manufacturing – 41%
· Hospitality – 36%
· Construction – 35%
· Agriculture – 35%
Jo Morris, Head of Insight at Novuna Business Finance comments: “Some may assume that conflict in the Gulf is a far-away issue that only affects governments and big businesses. Our findings show how quickly and how deeply UK small businesses have felt the impact of rising energy and fuel prices in the UK. Businesses that rely on heavy equipment and transport seem to have felt the impact most significantly – as have those enterprises based in extreme points of the UK, businesses that may have bigger transport and shipping costs.”
“Overall, the that fact four in five enterprises cite factors that are holding back business growth is significant. Actual growth forecasts each Quarter have been relatively static for some time. Whilst the vast majority of enterprises started the year working on new initiatives to secure growth, this is counter-balanced by the very high number that are trying to overcome obstacles and external market pressures. Our tracking suggests that if we want to see a major upturn in UK small business growth forecasts for the summer and autumn months, it is the barriers that need to be tackled first – and urgently. Today’s figures on barriers to growth give us an early indication of what to expect from actual growth forecasts for the months ahead.”
