Small businesses in London are the most likely of any region to predict growth in the next three months. The new quarterly data from Novuna Business Finance reveals that the proportion of small businesses in the capital predicting growth (49%) is now higher than the national average (37%) – and is an increase of 14% on their pre-pandemic growth predictions (35% in Q2 2019).
Specifically, more than two fifths (43%) predicted modest organic growth, while 6% anticipated significant expansion in the coming three months.
Similarly, this quarter also saw the proportion of small businesses based in London anticipating either contraction or significant difficulty to survive half that of the levels seen pre-pandemic (18% vs 9% Q2 2019).
Around the country, the quarterly poll of 1,496 small business owners revealed that 5% of predicted significant expansion for the three-months to 30 June, with 32% predicting sustained organic growth. While 46% of respondents envisaged no change on the previous quarter, 7% of business owners predicted contraction and a further 7% feared collapse.
Across all sectors, 37% of small business owners said they predicted growth for the next three months, the highest figure since the pandemic started more than two-years ago. The new quarterly data from Novuna Business Finance also reveals that the percentage of small businesses predicting contraction has also hit a two-year low (falling to just 7%).
Significantly, small businesses that had been most affected by the pandemic were those that now see the biggest return in confidence for the future. For example:
- Small business owners that had been forced to repurpose their enterprise during lockdown are now most likely to be those on the rise – with 41% of these business owners predicting growth for the next three months, a steep rise from 27% last quarter.
- Those enterprises that had been forced to close during lockdown are also now bouncing back, with the proportion predicting growth up to 28% (rising from 20% last quarter).
- In contrast, for businesses whose operating status was not impacted by Covid – or who continue to work from home – for these enterprises, growth forecasts remain unchanged on the previous quarter.
Jo Morris, Head of Insight at Novuna Business Finance said, “There is no question that many small businesses have been tangibly impacted by price rises, which directly impact the bottom line and supply chain. That said, it is important not to forget the seismic risks that enterprises had to cope with during the pandemic.
“Many had to close their doors, others had to fundamentally reinvent their business to survive – and we, at Novuna Business Finance helped many enterprises to adapt at this critical time. Those that experienced the most pain during lockdown are the small businesses that are forging ahead today. And it has taken six months since COVID restrictions fell away for us now to finally see the resilience of small businesses and their power to rebuild and recover.”