More than a third (35%) of small businesses expect their performance will improve over the coming three months. Less than a quarter (24%) believe performance will worsen, according to new Federation of Small Businesses (FSB) figures.
The domestic economy (57%) remains the number one barrier to small business growth, with access to appropriately skilled staff (28%) and labour costs (21%) also frequently flagged.
The main cost to running a business in the capital over the past three months has been rent and rates (35%). This has been largely as a result of increases to business rates as a result of transitionary changes this past April.
The proportion of small firms saying that gross profits are steady or increasing (62%) is also at a 12-month high, as is the share of exporters who report that international sales are stable or rising (81%).
Growth intentions are at their most promising since Q2 2017, with the vast majority of small firms (88%) planning to remain the same size or expand in the coming 12 months. More than three quarters (79%) report steady or increasing headcounts.
In a reversal of a previous trend, female small business owners are now more confident than their male counterparts. The SBI for women and men stands at +16 and +12 respectively in Q2 2018, compared to +10 and +17 respectively at this time last year.
Following the introduction of the General Data Protection Regulation (GDPR) in May, the proportion of small firms saying that regulation is a primary barrier to growth has surged 10 percentage points to 29% since this time last year.
Sue Terpilowski OBE, London Policy Chair, Federation of Small Businesses, said:
“London contributes over a fifth of the total Gross Value Added (GVA) to the UK economy and yet small firms are spending nearly a third of turnover on commercial space.
“Furthermore, with 72% of businesses expected to have a rent review in the next three years – we urge the landlords, authorities, estate management companies, property investment companies who own the majority of commercial space in the Capital to stand up and be counted and incentivise small firms to remain, or take up space, in London.
We urge them all to think beyond the ‘Fiduciary Duty’ they have to Shareholders and give greater recognition to the importance of independent businesses to our local communities.”