The Government is being urged not to revisit shelved plans for tax increases on the self-employed as new polling suggests business confidence is decreasing.
The data from the latest Small Business Index (SBI) shows confidence has fallen to +15 in Q2 2017 from +20 in Q1, marking the first fall since the EU referendum.
When asked about threats to expansion plans, the majority of small firms that responded highlighted the domestic economy; more than half (52%) see it is a barrier to growth. Other commonly flagged areas of concern were consumer demand (30%), labour costs (24%) and the tax burden (17%).
Operating costs for small businesses are now at their highest in four years.
A net balance of 66 per cent report increased operating costs in Q2 2017, up from 53 per cent in the same period last year.
Wilfred Mitchell, FSB Policy Chair for Northern Ireland, said: “Local small businesses were feeling more pessimistic even before the General Election was called, amid the breakdown of the Northern Ireland Assembly. Now alongside increasing inflationary pressure and rising labour costs, they have a whole new wave of political uncertainty to contend with.
“Clearly this is not the time to revisit failed plans for a national insurance hike on our self-employed. These strivers are the engine of our economy. In this unforgiving climate, the last thing they need is increased cost. This would act as a disincentive to business creation which is crucial to the Northern Ireland economy.” .
Mr Mitchell added: “Consumer facing businesses are really starting to feel the squeeze. Many small firms that operate in the agriculture, retail and hospitality sectors depend on EU 27 workers and ensuring these vital employees to Northern Ireland’s small businesses have the right to remain needs to be a first port of call once Brexit talks commence.
“For decades we’ve heard Governments discuss the need to create a balanced economy. It’s time for meaningful action. Too many small businesses, particularly here in Northern Ireland, are being held back by derisory investment in infrastructure, connectivity and skills. We look forward to working with the new administration on an ambitious Industrial Strategy which prioritises productivity growth across all regions of the UK.”