Increased confidence amongst small firms
As business confidence amongst small businesses hits a three year high Clarendon suggests it’s the minnows, rather than the major names, that are the key to prosperity
All signs continue to point to a recovery. Major names in business have confidently put their names to reports and editorials which predict the UK economy is set to emerge from the tunnel of global recession. When multinationals and FTSE giants talk about prosperity there is much enthusiasm. Yet one voice in the business world is rarely heard from but it is the true marker of success and wealth.
Small businesses have been hit hard by the recession. When small firms do badly, so does the UK. According to the Federation of Small Businesses, SME’s account for 99.9% of all UK private sector business and nearly 60% of all private sector employment. London has more small firms that anywhere else in the UK with over 800,000 of them.
When you look at the numbers, it’s easy to see why SMEs are so vital for a buoyant and prosperous UK economy. With bank lending down and business as a whole taking a hit, SMEs have been struggling to stay afloat.
A new report by the Federation of Small Businesses suggests that is set to change. It registered the highest confidence seen in the sector for over three years. The fear and prediction of negative growth at the end of 2012 appear to have evaporated in the first half of this year. London saw the largest growth in optimism compared to other small firms around the country.
One of the key indicators for business confidence is the ease at which small firms can get credit. In the survey 45% said they had been successful when they applied for a loan, 42.2% said they had been turned down. Two thirds of small businesses said they were worried about costs, including utility bills. Overall, the indicators that go together to offer a measure of confidence rose to 15.9 from 6.3.
The rise in confidence is a good thing for the capital. As they govern such a sizeable chunk of London’s business community it is the worry, lack of revenue and confidence that have hit the commercial economy. A return to confidence means a desire to expand, to gain more clients to grow and perhaps hire more staff.
For the business travel economy, of which Clarendon Serviced Apartments is part then this is positive news. Small firms doing business do not have the same kind of budget for expensive travel. Using a serviced apartment for longer term contracts or for business visits is more cost-effective than a hotel. Job growth means greater demand for serviced apartments.
The secret to a prosperous London is with the small business market. It makes up such a portion of the corporate community that when it is confident and turns its mind to growth it has a positive impact on the rest of the capital. A return to confidence is something to be celebrated.