Set against the warnings of a shrinking UK economy and full-blown recession, the nation’s small business community appears to be holding strong with an upturn in growth predictions across six industry sectors, according to new data from Hitachi Capital Business Finance. In the finance and accounting sector, the%age of small businesses predicting growth rose sharply from 33% to 48% in just three months. In legal services growth predictions have risen from 37% to 44% over the last six months.

The Business Barometer is a forward-looking study from Hitachi Capital and offers an early snapshot on how small businesses are feeling going into the autumn months. Overall, for the three months to 30 September, around one in two small businesses (49%) will be holding their position, with twice the number predicting growth (35%) over contraction or decline (16%). Furthermore, there are signs that the fall in small business growth predictions noted during Q2 – the first fall in 12 months – is already beginning to correct itself.

Whilst four sectors saw notable falls in small business growth predictions for Q2 – manufacturing, construction, retail and real estate – six industry sectors actually saw a rise in the number of business leaders that predicted growth. This was most significant in the professional services sectors, an indication perhaps that Brexit is creating work for small businesses that provide consulting services that relate to business planning, regulation and accounting.

 Growth predictions in manufacturing and construction continued to fall quarter-on-quarter – although, curiously for these sectors, the%age of small businesses predicting contraction was also lower than many other sectors.  Given the market context of low output in these sectors, the research suggests business owners in manufacturing and construction are being cautious and focusing on holding firm.

Transport and distribution emerged as the only sector where more small business owners now predict contraction rather than growth. The forthcoming outcome of Brexit may indicate whether this sector viewpoint is a short-term reflection of current market uncertainty or part of a deeper, long-term trend.