A summary of the Small Business Index, Quarter 2, 2024

A summary of the Small Business Index, Quarter 2, 2024, focusing on logistics and exporting.

As part of our commitment to understanding the real needs of our small business community, we make sure to keep up to date with as much information and analysis as possible!

Your time is precious, so we have summarised the Q3 report from The Small Business Index and urge you to follow their socials and explore all they have to offer in terms of resources.

NOTE: Article revised, original can be found here: https://www.fsb.org.uk/resource-report/small-business-index-quarter-2-2024.html

 

Summary

The Small Business Index (SBI) for Q2 2024 indicates a notable decline in small business confidence, falling to -10.8 points from +5.5 points in Q1. This decline is attributed to several economic factors affecting SMEs, particularly in logistics and exporting. Key findings relevant to these areas include:

 

Export Performance:

Small businesses reported a continued decline in exports, although at a slower rate, dropping from -8.2% in Q1 to -0.4% in Q2. This modest improvement raises cautious optimism for Q3, with expectations for a rebound in export activity. However, persistent issues stemming from Brexit and other economic pressures continue to impact export viability.

If you would like support in understanding how you can navigate shipping for your business, please contact the team!

 

Revenue Growth Expectations:

Confidence regarding revenue growth diminished significantly. While nearly half of small firms anticipated increased revenues in Q1, only 32.1% reported actual growth in Q2, with a similar percentage expecting declines in the upcoming quarter. This disconnect indicates challenges in maintaining both domestic sales and export performance.

 

Rising Operational Costs:

The overall costs of running a business remain high, with 80.4% of small firms experiencing increased costs compared to the previous year. Employment costs have emerged as the primary contributor to these rising expenses, further complicating the ability of SMEs to invest in logistics and export capabilities.

Speak to us to see how we can help you reduce your shipping costs.

 

Labour Market Challenges:

The employment landscape for small businesses continues to be precarious, with headcounts failing to grow for the ninth consecutive quarter. Small businesses have expressed concerns about rising labour costs and their ability to hire skilled workers, both of which directly impact their capacity to manage logistics and expand into export markets.

 

Increased Aspirations for Growth:

Despite the current downturn in confidence, 54.1% of small businesses expressed aspirations to grow within the next year—the highest level in three years. This positive sentiment may lead to increased investment in logistics and export initiatives, provided that economic conditions stabilize.

 

Credit Availability and Investment:

While there is a slight increase in small businesses applying for credit (up to 16.0%), perceptions of credit availability worsened, with the credit index dropping to -34.2. This reflects concerns about financing options available for logistics improvements and expansion into new markets.

 

While there are signs of potential recovery in exports and growth aspirations among small businesses, ongoing challenges related to operational costs, employment, and external economic factors remain significant barriers. It is crucial for the government and financial institutions to address these issues to foster a more conducive environment for SME growth in logistics and exporting.

 

We hope you found this of interest!

Download the full report below

Small Business Index, Quarter 2, 2024.pdf1.16MB