www.fsb.org.uk/scotland
SCOTLAND Q1 2020 SMALL BUSINESS INDEX Scottish Small Business confidence crashes amid coronavirus Small Business Confidence shutdown. In the first quarter of 2020, the FSB Scottish Small Business 60 Index (SBI) fell by 127.6 points to -154.8. This, perhaps unsurprisingly, 40 was the largest quarterly fall in the confidence barometer ever recorded and brings sentiment among Scottish businesses to the 20 lowest level since the index was established in 2012.
-80 -100 -120 -140
Scotland SBI
UK SBI
Q1 2020
Q3 2019
Q1 2019
Q3 2018
Q1 2018
Q3 2017
Q1 2017
Q3 2016
Q1 2016
Q3 2015
Q1 2015
Q3 2014
Q1 2014
Q3 2013
Q1 2013
-160
Source: FSB Small Business Index.
Net balance of small firms in Scotland reporting revenue/profit growth 30%
10%
-10%
-30%
-50%
-70%
Revenue
Profit
Q2 2020
Q4 2019
Q2 2019
Q4 2018
Q2 2018
Q4 2017
Q2 2017
Q4 2016
Q2 2016
Q4 2015
Q2 2015
Q4 2014
Q4 2013
-90% Q2 2014
With the lockdown only taking effect right at the end of the quarter, the issue of falling revenues only looks set to worsen as the crisis continues into Q2, with no end date set for easing the restrictions. With nine in ten (88.4%) of firms expecting sales to decline, compared to just 6.0% of businesses expecting their revenues to grow, the net balance for revenues expectations in Q2 2020 is down to -82.4%. This is a fall of 81.8 percentage points, down from a net positive balance of 0.6% recorded the last time this question was asked, in Q3 2019.
-60
Q2 2013
Small businesses in Scotland reported weaker revenues over the past three months but expect much worse to come. As was inevitable, the measures to contain the virus have affected sales across a number of industries, with a large proportion of Scottish small businesses already seeing revenues take a hit in Q1. In total 60.8% of businesses recorded falling revenues in Q1, compared to 20.1% recording a rise. The resulting net balance of -40.7% is a record low for the FSB index.
-40
Q4 2012
The coronavirus outbreak was held responsible for a “significant” reduction in confidence by almost three-quarters of Scottish small businesses. Overall, 85.7% of businesses in Scotland felt that the coronavirus was directly responsible for a loss of confidence, and 73.8% of businesses believed the loss of confidence was significant. On the contrary, just 4.5% of businesses saw an improvement in their confidence. These may well be the type of businesses for whom the huge increase in the number of people working from home has presented new opportunities.
-20
Q3 2012
Small business confidence fell by record levels in every one of the UK’s regions and nations during Q1 2020. This meant that, across the UK as a whole, the small business confidence index fell by 121.8 points in Q1 to stand at -143.4. During the first quarter of 2020, the only part of the UK where small businesses were less confident than Scotland was in London, where the index fell by 120.0 points to -156.4. Before Q1 2020, the worst UK-wide reading on the SBI was -24.5, highlighting the scale of the difficulty facing the economy in the weeks and months ahead. The current crisis is different from previous recessions as new restrictions were implemented rapidly and, within just a few weeks, much of the economy had been deliberately shut down for an indeterminate period.
0
Q2 2012
Besides the headline confidence index, record lows were also reached on several other key measures of small business performance.
Source: FSB Small Business Index