Confidence at low ebb but small firms pledge to keep on battling
Confidence among small firms has fallen but they are determined to fight on, an industry body has said.
The latest Federation of Small Businesses (FSB) index said confidence was down from a measure of 37.9 last year to 20.3 this year.
The decisive victory of the Conservatives in May's general election had boosted confidence initially but the Budget in July was causing some nerves.
And the FSB said firms in Northern Ireland were being affected by Stormont's political instability and the resulting economic uncertainty.
More firms were reporting a fall in investment intentions in the third quarter, with 22% planning to spend money on their business, compared to 26% over the same period last year.
In addition, fewer firms were expeccted to grow, with expansion plans reported by just 58.7% of respondents, down from 65.3% in the second quarter of this year.
But firms were doing their best in the circumstances, and productivity among small businesses had grown, the FSB said.
Wilfred Mitchell, the FSB's policy chairman in Northern Ireland, said: "These latest results show that small businesses appear more cautious about their prospects than in recent quarters. To encourage growth, business owners require confidence and whether they are local businesses or foreign direct investors, confidence plays a large part in making investment decisions.
The unpredictability of the political situation over recent months causes businesses to be cautious and reluctant to invest, which has an immediate and negative impact on job creation and economic recovery and growth."
Mr Mitchell said skills shortages were still a worry for small firms - and well over one-third said a lack of skills was a barrier to growth.
That was driving up wage costs, which were a further area of concern following the introduction of the Living Wage of £9 per hour from 2016. But he said members of the FSB were still determined to succeed.
"Despite confidence levels decreasing, our members remain steadfast in their intentions to grow, to create jobs and to export."
He added: "However it is essential that our elected representatives prioritise the need to reassure small firms and create the right environment for them to flourish."
The FSB will launch a Northern Ireland Assembly manifesto in November.