The percentage of small businesses in Yorkshire and the Humber predicting growth for the next three months has risen since the start of the year to 26% for April. This is the highest figure in the region for 12-months and represents improvement over four consecutive quarters - according to new research from Novuna Business Finance. Further, the steady rise in the percentage of local small business growth has been achieved despite a very challenging macro-economic context.

The findings are from the Business Barometer study by Novuna Business Finance, which has tracked small business growth outlook every quarter since 2015. The new data also suggests early signs of a north-south divide emerging for the summer months. In addition to the rise in the percentage of small businesses predicting growth across Yorkshire and the Humber, there was a big rise in the North East, with small business growth forecasts up from 22% to 33% since last quarter. In contrast, the percentage of small businesses in London predicting growth fell (from 40% to 37%). The same was true in the South East, with growth forecasts falling from (23% to 21%).

These rising small business growth forecasts from Yorkshire and the Humber are all the more impressive given the challenging context in which many enterprises operate. The Novuna Business Finance findings come at a time when 82% of small businesses in the region feared disruption to their enterprises that could result from current geo-political and economic uncertainty. Of those that expressed concerns:

51% of small businesses feared the impact the Middle East war would have on their business and supply chain. This rose sharply to 70% for small businesses in the transport and distribution sector, 68% for those in the agriculture sector and 61% of manufacturing small businesses.
19% of respondents in Yorkshire and the Humber said they still feared the potential impact of US tariffs on the UK.
15% of small businesses also said that the war in Ukraine and instability in the broader region would impact their business and supply chain.
As a result of all this uncertainty on the UK economy, 64% of local small businesses said they feared the prospect of the UK Government raising UK taxation later in the year.

These findings follow Novuna Business Finance research in March on rising energy prices, after the outbreak of war in the Middle East region, which revealed that small businesses estimated their transport costs would increase by an average of £753.56 a month, and the cost of running machinery estimated to rise by an average of £785.92.

Sabrina Ahmed, Customer Engagement Manager at Novuna Business Finance comments: “After 10 years of tracking small business outlook across Yorkshire and the Humber, it is positive to see a slow but steady rise in small business growth forecasts, despite the seriousness of current worries over energy prices, the fear of future tax rises and general macro-economic uncertainty. We have learned so far this year that many small businesses are working hard to reduce fixed costs, free up working capital and are taking steps to diversify their business. All these practical steps are supporting a rise in the number of businesses across the region predicting growth over the next three months. Novuna Business Finance is committed to supporting established enterprises with funding that will help them navigate market uncertainty and power future growth.”