43% of small business owners say that a recession is their main concern for 2023
With the shrinking UK economy, high inflation, and increased interest rates affecting consumer spending, fear of the looming recession is taking hold among small business owners. This is according to new SME Outlook 2023 research from the small business lending company, iwoca.
The research found that:
- 43% of small business owners say that a recession is their main concern for 2023
- With the rapidly increasing cost of energy, raw materials, and labour scarcity, inflation is the biggest challenge for 38% of small businesses
- 29% say decreased consumer spending is a key concern
- A further 38% say that increased business running costs are at the top of their list of worries
- 76% of small business owners have some concern that energy bill support for businesses may be reduced in the first six months of this year
- 32% of SMEs are significantly concerned about the potential decrease in government energy support
- 25% of SME owners expect their turnover to shrink over the coming months
- 43% believe that they will personally be worse off by the end of 2023
- Only 26% of small businesses expect an increase in revenue over the next year. This is down from 28% at the beginning of 2022.
When looking at hiring in 2023, small business owners expect to limit hiring in the next 12 months. Seventy-nine percent of small business owners expect to employ the same number of workers this year as in 2022. Only 7% expect to employ more staff this year, 2% less than last year.
Seema Desai, iwoca’s Chief Operating Officer, said: “This recession presents extreme uncertainty for small businesses. As big banks retrench, our job as a specialist SME lender becomes even more important. Business owners are going to need finance to help with cash flow, pay staff wages, increase stock and of course cover things like higher energy bills and cost of materials.”