News Release March 12, 2007

From: Europasurvey
Subject: UK SMALL BUSINESS INDEX

Contact: Dr. Ann Sontz
europasurveymail@lycos.com

UK SMALL BUSINESS CONFIDENCE RISES AS SPRING APPROACHES

The bi-annual UK Small Business Confidence Index conducted by Europasurvey
in February, 2007 rose 3.7 points. The INDEX, which tracks 100+ UK SBEs, also rose
by 1.6 points from results presented in July 2006.

The February, 2007 survey polled SBEs on two additional issues:
(1) Which factors in the business climate might have a negative impact on future operations?; and (2)Which local service providers were used regularly
(more than twice) during the past six months?

1. Negative Impacts included obligatory pension planning (45.6%), utility costs
(33.7%), and uncertainty in tax planning (29.5%). An onset of Sunday shopping
hours figured less prominently in business strategies( 21.1%).

2. Use of Local Services: A great majority (63.3%) of SBEs in the survey used
local computer consultants and computer supply outlets. A similar number (63.4%)
regularly called upon local accountants and financial planners. These service
providers were called upon more by micro-businesses (sole traders) and
SBES with 50 or fewer employees than by small businesses with 51-100
in staff: 45.1% more sole traders and enterprises with 50 or fewer employees rely
on local computer consultants; 14% more on community computer supply stores;
6% more on local accountants; and 4% more on home, building, and office maintenance services.

" A rise of 3.7 in the February, 2007 Index seemed less robust when compared
to the 4.1 rise of July, 2006, as these are compared with the 2005 benchmark.
However, the gain appears to indicate a healthy business confidence since its
backdrop includes three hikes in banking interest rates beginning in August, 2006,
a customary decline in post-Holiday consumer spending patterns, and a need
to develop strategies that deal with pension planning and upward moves
in utility costs. Further, the Index found a tightening link among SBEs and a
variety of local service providers. This link was highlighted whenever micro-businesses
and those with up to 50 in staff were considered. This finding suggests
that SBE start-ups with few in staff, including sole traders rooted in internet-based economies, may not act to encourage general unemployment. Rather, they exhibit a consistent ability to indirectly generate skilled employment at the local level."

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EuropaSurvey’s "Small Business Confidence Index"© is subject to a copyright and a disclaimer.

**Permission is given to reprint, or to cite data from the Index, provided the source is cited, or whether data or written materials from the poll appear in web-based or print media.

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POLL: Result of EuropaSurvey’s "Small Business Confidence Index—UK"©            February, 2006

UK SMALL BUSINESSES ENJOY UPSWING AMIDST UNCERTAINTY OVER TURNER COMMISSION’S PENSION PLAN

A rise of 2.7 points in business confidence was registered by SBE owners and managers in a poll conducted by Europasurvey in February, 2006.

The "Small Business Confidence Index –UK" is published every six months. The previous poll was taken in June, 2006

The greatest rise in UK small business confidence was registered by those in the Construction Industry ( up 25.5 points), followed by SBE owners and managers in the Business Service sector ( up 19.5 points). The Business Service sector includes SBEs specializing in financial and IT services. Wholesalers and Retailers also registered a rise in business confidence of 4 points since June, 2005.

This upswing in confidence within the UK’s small business community may be related to a rise of 1.8% in household expenditures that appears to have spilled over into the first quarter of 2006 from the Christmas and holiday shopping season in 2005.

The upswing also occurred despite considerable SBE uncertainty over the Turner Commission’s Pension Report. The report urged compulsory, employer participation if an employee opts for contributions to a National Pension Savings Scheme (NPSS). According to the proposed NPSS, an employee would contribute 4% of gross salary, an employer 3% of that salary, and the government 1 percent.

Europasurvey’s poll of UK SBEs found that the great majority of owners and managers of small businesses must deal with a variety of pension options besides the Turner Commission’s report. As a result, a high level of “uncertainty” about pension planning (65% of respondents) was evident in the poll despite a rise in business confidence.

Europasurvey is a web-based, independent research organization that focuses on issues of political and economic importance in the European Union. Its "Small Business Confidence Index—UK"© is undertaken at 6-monthly intervals, and is one of the few polls that targets business conditions among 100+ small businesses throughout the UK with 100 or fewer employees. This focus on the UK’s SBEs is prompted by the fact that the UK’s small business community now provides over 50% of national employment.

• February’s poll purposely included a survey of SBE attitudes towards the Turner Commission’s NPCC. All members of the EU share a growing concern over aging populations. All members of the EU also have economically important small business sectors with extensive workforces. However, according to the director of the Europasurvey poll, Dr. Ann H.L. Sontz:
  
   "It is only in the UK that pension planning is being seriously debated. The outcome of this debate will help provide a model for others in the EU, where the expected large increase in adults of retirement age during the next decade will inevitably provoke a need to provide for the financing of manageable pensions and other legacy costs."
   

EuropaSurvey’s "Small Business Confidence Index"© is subject to a copyright and a disclaimer.

**Permission is given to reprint, or to cite data from the Index, provided the source is cited, or whether data or written materials from the poll appear in web-based or print media.

 

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POLL RESULTS: EuropaSurvey "Small Business Confidence Index—UK"©   
July,  2006
UK Small Business Confidence Rises for Second Semi-annual Period.

A rise of 4.1 points in business confidence was registered by small businesses in a UK poll completed by Europasurvey® International in July, 2006.The previous UK Small Business Confidence Index© appeared at the beginning of March, 2006. It climbed 2.7 points from the benchmark established in 2005.

The UK Small Business Confidence Index© is a detailed survey that closely tracks business confidence among 100+ SBEs on a bi-annual basis. In addition to business confidence, a topical question is asked in each bi-annual poll. This poll’s question was: What, if any, strategies have you adopted to deal with a rise in energy costs?

Over 45% have begun, or plan to begin, sales and discounts in the near future. A secondary strategy involved staff considerations, with 34% planning to increase productivity--while either downsizing staff size, or not adding staff as the autumn season approaches. Over 50% of SBEs now use Internet advertising. The July, 2006 poll indicated that 14% of these had already raised their level of Internet advertising as one of three major business strategies adopted in the face of an increase in energy costs. For the first time, the number of micro-businesses, those who are self-employed or with home offices, reached over 13% of those polled. Both micro-businesses and family firms with 2-10 in staff exhibited the least inclination (under 20%) towards adjusting to a hike in energy costs by instituting sales or online sales. Firms with2-10 employees were also the least likely to integrate a reduction in staff size into current business strategies (17%).

"UK small business confidence remains healthy. It appears sales-driven, with origins in the World Cup season. However, sales and discounts are also emerging as a primary strategy that may continue in the face of energy cost increases. Given the possibility of further hikes in energy rates, the sustainability of small business confidence may rest increasingly on measured shifts in consumer confidence levels."

Europasurvey International is an independent Internet journal devoted to a discussion of
UK, EU, and European affairs. Further information on the UK Small Business Index© is available at www.europasurvey.org, where the benchmark survey and its 2006 updates may be freely downloaded. Contact: Dr. Ann H. L. Sontz, executive editor.

EuropaSurvey’s "Small Business Confidence Index"© is subject to a copyright and a disclaimer.

**Permission is given to reprint, or to cite data from the Index, provided the source is cited, or whether data or written materials from the poll appear in web-based or print media.

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