Andy Burnham has inherited a deepening small business crisis after new figures revealed confidence has fallen across almost every region of England, with firms warning of mounting pressure from rising costs, uncertainty and weak growth.
The proportion of small business owners expecting growth has slumped to just 24 per cent—the lowest level in 12 years—with construction, retail and hospitality among the hardest-hit sectors.
The figures underline the scale of the economic challenge facing the former Manchester mayor, who entered Downing Street last week promising to lead a more pro-business government.
However, there was little evidence of an immediate “Burnham bounce” in the latest survey from Novuna Business Finance, which questioned 1,000 small businesses between July 5 and 8, before the new Prime Minister took office.
The North West stood out as the only region where confidence improved, with the share of businesses expecting growth rising from 26 per cent to 28 per cent in the latest quarter.
Every other English region recorded a decline.
The sharpest falls came in the South East, where growth expectations dropped from 21 per cent to 16 per cent, and the South West, where they fell from 22 per cent to 15 per cent.
London remains the strongest-performing region, with 36 per cent of businesses expecting expansion, but even the capital has fallen to a 12-month low. A year ago, almost half of firms in London expected growth.
The downturn marks a dramatic reversal from the optimism seen two years ago, when confidence peaked at 35 per cent amid hopes that a Labour government would deliver a stronger pro-growth agenda.
Since then, confidence has steadily weakened as businesses have faced higher taxes, sluggish economic growth and rising operating costs.
The latest figures also reveal a worrying milestone: for the first time since the Covid lockdown period, the number of businesses expecting growth is equal to the number reporting they are contracting or struggling to survive.
Jo Morris, Head of Insight at Novuna Business Finance, said geopolitical tensions, rising fuel costs and political uncertainty were all weighing on business planning.
“The one thing small businesses don’t like is uncertainty,” she said.
For Burnham, who has pledged to rebuild growth outside London and place business at the centre of his premiership, the warning signs are immediate.
With energy costs rising again and firms already operating under intense pressure, Downing Street faces a difficult task convincing entrepreneurs that a new era of economic confidence has begun.
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