Novuna Business Finance research finds construction, retail and hospitality recording particularly large confidence declines
LONDON Small business growth expectations in England have dropped to 24 percent, the lowest reading in the 12-year history of the Novuna Business Finance survey, according to research published in early August 2026.
What Sectors Have Actually Recorded The Sharpest Confidence Declines
Construction, retail, and hospitality recorded particularly large declines in growth expectations, according to the survey, sectors that have historically shown greater sensitivity to consumer spending patterns and broader economic uncertainty than other parts of the small business economy.
Which Region Bucked The Overall Downward National Trend
The North West was the only region to report an improvement in growth expectations, with the proportion of firms predicting growth rising from 26 percent to 28 percent, standing in contrast to the broader national decline recorded across most other regions surveyed.
What Novuna’s Own Analysis Identified As The Primary Drivers Of This Decline
Novuna said geopolitical tensions, higher fuel costs, and political uncertainty were making businesses more reluctant to commit to investment and expansion, a combination of pressures that appears to be affecting small business sentiment across most sectors and regions simultaneously.
How This Finding Compares To Separate Business Confidence Data
The Institute of Directors also reported a slight decline in confidence during July, with the organisation’s chief economist warning that renewed conflict in the Middle East could intensify cost pressures and reinforce the squeeze on households, a concern that broadly aligns with Novuna’s own findings about geopolitical tensions affecting business sentiment.
What This Means For The Broader UK Small Business Sector Going Forward
With growth expectations at a record survey low, small businesses across England appear to be entering the latter half of 2026 with considerably reduced appetite for expansion, a trend that could have knock-on effects for broader employment and investment figures if sustained through the remainder of the year.
What Remains Unclear About How Long This Confidence Decline Will Persist
Neither Novuna nor the Institute of Directors offered a specific forecast for when small business confidence might recover, with both organisations linking near-term sentiment closely to the trajectory of ongoing geopolitical tensions that remain difficult to predict with confidence. Further UK business coverage continues at bohiney.com.
SOURCE: https://bohiney.com