The health of small businesses in the UK is at its lowest level in three years, according to the latest SME Health Check Index.
The quarterly study of UK small businesses, conducted by the Centre for Economics and Business Research (Cebr) in association with CYBG, owner of Clydesdale and Yorkshire Banks, has found that a number of key outlook indicators have taken a knock in the past quarter - confidence has plummeted, input costs are up and revenue growth has slowed.
Employment, revenue, confidence and net business creation are also down compared to the last quarter. Businesses in the North East, West Midlands and Yorkshire have experienced the sharpest declines.
Overall, the Index fell from 56.3 in Q2 of 2017 to 46.9 in Q3. A score of 100 would indicate maximum improvements across the Index's eight indicators, while a score of 0 would point to major declines in all eight indicators. Six out of the eight indicators in the most recent SME Health Check Index have worsened since the previous quarter.
David Duffy, ceo at CYBG, said: "The recent announcements made by the chancellor in his Budget to help SMEs, especially on business rates, were very welcome. We also welcome the publication of the Industrial Strategy White Paper … however, what is clear is that more needs to be done in the short term to help boost confidence amongst SMEs while we wait for the longer-term benefits of some of these policies to take effect."
Find out more about the latest SME Health Check Index in this video:
Also this week, the British Chambers of Commerce (BCC) has downgraded its three-year outlook for the UK economy, cutting growth expectations from 1.6% to 1.5% in 2017, from 1.2% to 1.1% in 2018, and from 1.4% to 1.3% in 2019.
With the UK economy expected to continue on a path of "sluggish growth", BCC is urging a stronger focus on "fixing the fundamentals". As well as Brexit, it says the big issues are "skills and labour shortages, congested infrastructure, patchy digital connectivity, a slow planning system and high up-front costs".
Dr Adam Marshall, BCC director general, said: "Even the best possible Brexit deal won't be worth the paper it's written on if the Government fails to address the many long-standing, and well-known, barriers to growth here at home. Ever-rising upfront costs, a labour market at capacity, growing pressure on land use, and a physical and digital infrastructure in need of investment and expansion, all prevent UK firms from reaching their potential."