Election bounce signals small business confidence surge in London
Wednesday 7th August 2024
The percentage of London-based small businesses predicting growth for the next three-months has hit a two-year peak – and small business confidence currently is higher in London than anywhere else in the UK – according to Novuna Business Finance.
Set against reports of sharp falls in business confidence in France and Germany - with fears that the Eurozone’s two biggest economies could be set for a downturn - UK small business confidence has enjoyed a positive upturn in the weeks following Labour’s election win. Nationally, the percentage of small business owners predicting growth has risen from 30% to 35% compared to the three-month period ending on 30 June. In London, growth predictions have always been above the national average – but in the last quarter they have risen significantly from 43% to 49%.
Percentage of small businesses predicting growth each quarter – results over time
Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | |
London | 42% | 46% | 44% | 42% | 41% | 42% | 38% | 39% | 46% | 44% | 43% | 49% |
UK avg. | 35% | 36% | 34% | 34% | 31% | 33% | 32% | 32% | 32% | 33% | 30% | 35% |
The new small business survey, was commissioned by Novuna Business Finance during the fortnight immediately after the General Election. The results revealed an election bounce: across eight industry sectors and nine UK regions, more small businesses are predicting growth than was the case in the three-month period leading up to the General Election.
At Novuna Business Finance, our Business Barometer study has been tracking the growth outlook of small business owners every quarter for more than a decade now. The results over time show a remarkable consistency quarter-on-quarter, with outlook seldom changing significantly over a short period of time. Our latest research results represent the biggest quarter-on-quarter swing in growth outlook since the spring of 2021. We don’t think this is based on the political views of small business owners, rather it’s more a reflection of their perceived need for certainty. The sense of a new government coming in with a big public mandate, together with falling inflation, suggests solidity - and small businesses need a sense of stability and certainty to plan. Supporting a summer of resurgent business confidence, we at Novuna Business Finance are working to provide flexible tailored financial solutions that help established small businesses in and around London to achieve their true potential.
Jo Morris
Head of Insight
Novuna Business Finance
Sector findings
Across nine industry sectors, this quarter sees a rise in the percentage of small businesses predicting growth for the next three months (up to 30 September). Compared to the three months leading up to the General Election, there are significant rises in growth predictions reported in: Construction (from 15% to 36%), Agriculture (from 28% to 40%), IT/Telecoms (28% to 38%) – and also a welcome boost for the Retail sector (rising from 26% to 37%). Overall, small businesses in the Finance, Agriculture and Media sectors were most likely to be predicting growth over the next three months.
Percentage of small businesses predicting growth by industry sector
Q3 2024 | Q2 2024 | |
Finance / Accounting | 44% | 41% |
Media | 40% | 36% |
Agriculture | 40% | 28% |
Medical | 39% | 36% |
Legal Services | 38% | 33% |
IT / Telecoms | 38% | 28% |
Retail | 37% | 26% |
Construction | 36% | 15% |
Manufacturing | 35% | 37% |
Transport & Distribution | 31% | 34% |
Hospitality/Leisure | 30% | 30% |
Real Estate | 28% | 25% |
Education | 26% | 33% |
Regional findings
Across nine UK regions, the new July data from Novuna Business Finance reveals a rise in the percentage of small businesses predicting growth. Confidence remained was strongest in London, with 49% predicting growth for the next three months. There were also significant quarter-on-quarter rises for small businesses based in the East (up from 36% to 43%), Scotland (up from 27% to 34%), Wales (up from 15% to 32%), the North East (up from 19% to 31%) and the East Midlands (up from 24% to 32%).
Percentage of small businesses predicting growth by industry by region
Q3 2024 | Q2 2024 | |
London | 49% | 43% |
East | 43% | 36% |
Scotland | 34% | 27% |
South East | 33% | 39% |
West Midlands | 32% | 29% |
East Midlands | 32% | 24% |
Wales | 32% | 15% |
North East | 31% | 19% |
Yorkshire/Humberside | 28% | 27% |
North West | 26% | 23% |
South West | 22% | 29% |
Notes
To register for a copy of the full report by Novuna Business Finance, exploring growth plans over the last decade visit:
The research was conducted by YouGov among a representative sample of 1,263 small business leaders between 6-24 July 2024 – including a representative sample of 258 small businesses in London. The research was conducted online.