The percentage of small businesses predicting growth for the three-month period of July to September has fallen to 24%.

Tracking research from Novuna Business Finance reveals significant downturns in growth forecasts across the construction (15%), retail (21%) and hospitality (21%) sectors. Whilst small business growth forecasts rose modestly in the north west, they fell in every other region of England and Wales – with the position flat in Scotland. 

Further, the July-September figures from Novuna Business Finance mark the first time since the UK went into Covid lockdown that the percentage of small businesses contracting or struggling to survive (24%) has matched the proportion predicting growth (24%).

The Business Barometer tracking study from Novuna Business Finance goes beyond general feelings of confidence and, instead, every quarter tracks the percentage of small business owners that forecast tangible business growth over a three-month period.

The sector picture: There was a mixed picture on small business growth forecasts across industry sectors. Whilst manufacturing, transport and IT recorded quarter-on-quarter rises in growth outlook, there were significant falls elsewhere. In the construction sector, the percentage of small businesses predicting growth almost halved to 15% and there were also sharp falls for enterprises in the hospitality and retail sectors – ruling out the likelihood of a much-needed ‘feel-good’ bounce from the World Cup and hot weather.

Jo Morris, Head of Insight at Novuna Business Finance comments: “Following a quarter-on-quarter slide in small business growth forecasts during 2025, this year promised hope of recovery – with the percentage of small businesses forecasting growth edging up to 28% by the Spring. However, the fall to 24% this quarter is a setback and (excepting the quarter when the UK went into the first Covid lockdown) growth forecasts now stand at their lowest level since the Business Barometer study began in 2014.”

 

“At Novuna Business Finance, we remain committed to supporting established businesses as they plan for the future, helping them invest in long-term opportunities that can drive growth, improve operational efficiency and strengthen cash flow. Whilst small business outlook is cautious, the community continues to demonstrate strong resilience. Now is the time for everyone to support SMEs with what they need to create jobs and drive future economic growth.”