A new study has found that this summer sees a two-year high for the proportion of seasonal businesses predicting growth for the quarter ahead.
Tracking data from Novuna Business Finance has found that 40% of small seasonal businesses predict growth for this summer - a 25% rise on the start of the year and a favourable position compared to non-seasonal businesses. Around four in ten SMEs class themselves as seasonal businesses.
The findings are from Novuna's Business Barometer study, which has tracked small business growth forecasts every quarter for the past nine years. The latest survey of 1,103 small business owners has revealed significant divergence according to the age of the business:
- Of small businesses that have been trading for less than five years, 51% predict growth over the summer, a sharp rise on 42% last quarter and the highest figure on record since the tracking study began;
- Older enterprises (trading for more than 20 years) saw the percentage predicting growth fall to a two-year low of 24%.
Some sectors are also doing better than others, it seems. In the hospitality sector, growth forecasts have improved - up from 24% to 36% over the past six months. In transport and distribution, growth forecasts have hit an 18-month high at 35%.
Set against this, growth forecasts in the retail sector have hit a 12-month low, falling to 27% and the percentage of small businesses predicting growth in both manufacturing and IT/telecoms has hit a two-year low (32% and 35% respectively). Growth predictions are also falling in the construction sector.
"Small businesses that rely on seasonal peak periods are leading the sector's growth forecasts. Seasonality can be a blessing and a curse for small businesses, given these enterprises depend more heavily on shorter peak periods for trading. When market conditions favour them, things can go well but disruption from challenges like the pandemic, interest rate rises and extreme weather can hit them hard. It is pleasing to note from our latest study that seasonal small businesses out-strip the national average in predicting growth for the summer period." Jo Morris, head of insight, Novuna Business Finance.
Written by Rachel Miller.