As 2024 fades into history, Novuna Business Finance looks back at a volatile year for small businesses
Last summer suggested a resurgence in growth outlook was on the cards for small businesses in the East of England. The summer period saw a peak for the percentage of businesses working on initiatives to secure future growth.
Q1 2023 | Q3 2023 | Q1 2024 | Q3 2024 |
68% | 58% | 58% | 70% |
Set against this, actual quarterly growth outlook did not improve after Q3 2024. In fact, it fell sharply from 43% to 27%. The East stands as one of a handful regions where growth outlook has fallen since the general election – a time when there has been significant growth in London, the Midlands, the North West and North East.
Quarter | East | National Average |
Q4 2022 | 29% | 34% |
Q1 2023 | 25% | 33% |
Q2 2023 | 33% | 32% |
Q3 2023 | 32% | 32% |
Q4 2023 | 31% | 32% |
Q1 2024 | 24% | 33% |
Q2 2024 | 36% | 30% |
Q3 2024 | 43% | 35% |
Q4 2024 | 27% | 35% |
Our quarterly tracking research, now in its tenth year, goes beyond an attitudinal snapshot of business confidence and instead tracks the percentage of business owners that forecast actual business growth each quarter.
Budget fears
The fall in business growth outlook for Q4 2024 coincided with regional small business owners being very concerned about the Autumn Budget. Across the region, 87% of business owners feared the government might make announcements that would negatively impact their growth prospects.
While employers’ National Insurance proved to be the big development, the range of regional concerns give an indication of the issues business owners in the East are concerned about – and the need to control costs.
Top Budget fears in the East
Income tax rises – 48%
Increase in National Insurance – 33%
Tax on pensions – 27%
Cutting the VAT registration threshold for small businesses 22%
Raising the National Living Wage – 20%
Cost of living legacy
In addition to Budget fears, 83% of business owners in the East of England still feel they are living with the long tail of the cost-of-living crisis and its adverse impacts. Across the region, 27% of enterprises bemoan being hit by rising costs from my suppliers with 24% saying they are unable to pass on inflationary prices increases to their own customers. In addition, 24% say they are still struggling with higher energy prices, in terms of running their businesses.
Jo Morris, Head of Insight at Novuna Business Finance, said, “Q4 proved to be challenging for businesses in the East of England. Growth fell sharply after a strong summer and Budget fears have been compounded by the enduring costs legacy from the economic downturn of recent years.
“On the upside, the long-term growth picture for the region is good, so it may prove that Q4 2024 is a blip. The investment made in future grown plans may yet bear fruit in the months ahead.”
East of England Vs. the national average
% predicting growth in Q2 24 | Still Coping with cost of living legacy | % Worried about the Autumn Budget |
27% V 35% | 83% V 85% | 87% V 86% |
The findings are from the Novuna Business Barometer study which tracked small business outlook for the last 10 years. The nationally representative survey asks 1000 small business owners about their growth predictions every three months.