In the first quarter of 2024, 35% of business owners reported anxiety over market fluctuations, a slight decrease from the peak in the first quarter of 2022 during the market unrest following the government's mini-budget, yet this figure is still significantly higher than the 18% reported in the first quarter of 2015.

Even with inflation rates stabilising at 4% in February, the lingering effects of rates reaching as high as 11.1% in the previous 18 months have deeply impacted small business owners' perspectives. Notably, concern over interest rates has grown over the past eight years, from 16% to 21%, aligning closely with figures from a year prior (22%).

The past year has seen a rise in businesses struggling with cash flow management, up from 19% to 21%, making it one of the top concerns. Likewise, anxiety about retaining business has slightly increased to 22% from 21% last year.

Sector analysis uncovers specific challenges, with construction and real estate sectors expressing the highest levels of concern at 84% and 87% respectively, marking the highest figures since record-keeping began in 2015. Since 2022, both sectors have seen rising anxiety among business leaders. Hospitality (56%) and retail (61%) sectors also highlight market volatility as a primary issue, with interest rates particularly troubling 44% of hospitality businesses.

Brexit-related concerns have decreased to their lowest ever at 12%, down from 26% four years ago, yet remain a significant issue for the retail (30%) and IT (26%) sectors. Concerns over the long-term effects of COVID-19 have dramatically fallen to 6% from 39% in 2021, but 22% of businesses in the hospitality and leisure sector still consider it a major problem.

Regionally, businesses in Yorkshire and the Humber have shown a marked increase in anxiety, from 77% in 2022 to 82%, making them the most concerned region. In Wales, concern has also risen over the last two years, from 72% to 78%.

Joanna Morris, Head of Insight at Novuna Business Finance: “Small business owners might be mildly relieved by the recent stabilisation of inflation rates, but it goes without saying that the long shadow cast by the previously high rates and market turmoil witnessed over the past 18 months has had a monumental effect on their outlook and operations. As the backbone of the economy, small business owners find themselves in a relentless battle against rising costs and unpredictable market conditions, making the task of forecasting and managing their financial futures for the long term nigh on impossible.

“Leaders are crying out for a period of steadiness, predictability, and above all, certainty, Yet, with three-quarters of business leaders admitting to sleepless nights currently, it's clear they are not finding this stability. This data serves as a crucial reminder of the resilience and adaptability required from small businesses to navigate these tumultuous times. However, it also acts as a clarion call for leaders to engage with organisations like Novuna Business Finance, which can assist them in planning for the long term. Such collaboration can help businesses navigate economic volatility more effectively, positioning them not just to survive but to thrive amid challenges.”