The percentage of UK small businesses citing barriers holding their business back from growing has hit a six-year peak (84%), with the impact of overseas conflict on energy and fuel prices in the UK now a serious concern for one in three enterprises (32%).
The findings from Novuna Business Finance show that current geo-political uncertainty is dominating the disruption felt by small business owners this spring, proving to be far more significant than local or immediate market challenges. The most significant barriers to growth cited included: macro-economic uncertainty (51%), rising oil prices (32%) and, as a consequence of this, the impact on higher running costs (31%). In contrast, the cost of skilled labour (20%), volatile cashflow (17%), fluctuating exchange rates (7%), digital proficiency (6%) and having outdated equipment (5%) emerged as relatively smaller concerns.
Who’s being held back the most by rising energy and fuel prices in the UK?
Around the UK, small business in geographical extremes were far more likely to be impacted by rising energy price rises. Business owners in Scotland (40%), Wales (38%) and the South West of England (42%) were significantly more likely than the national average (32%) to say the impact of overseas conflicts on energy and fuel prices in the UK were a barrier holding their business back from growing.
By industry sector, small businesses in Transport, Retail and Manufacturing were most likely to say that rising energy and fuel prices were material barriers holding back business growth.
· Transport & distribution -58%
· Retail – 45%
· Manufacturing – 41%
· Hospitality – 36%
· Construction – 35%
· Agriculture – 35%
The general picture beyond oil
The research findings are from the Business Barometer study by Novuna Business Finance, which has been tracking small business growth outlook for more than a decade. The long-term picture suggests the percentage of enterprises experiencing barriers to growth has been slowly rising in recent years, but the new norm is at a higher level than the years before the pandemic in 2020.
Q2 2016 Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 Q2 2022 Q2 2023 Q2 2024 Q2 2025 Q2 2026
72% 74% 73% 79% 91% 81% 81% 80% 80% 83% 84
· This Quarter, small businesses in the Manufacturing (94%), Retail (95%) and Transport/Distribution (90%) sectors are most likely to cite one or more barriers holding back planned business growth.
· In Agriculture, the percentage of small businesses bemoaning barriers to growth has hit a four-year peak (86%).
· In Construction, Retail and Media, growth barriers are at their highest level since 2020.
· Across six UK regions, there has been a year-on-year rise on the percentage of small businesses citing factors holding back growth – and in London, growth barriers hit a six-year peak (88%).
Jo Morris, Head of Insight at Novuna Business Finance comments: “Some may assume that conflict in the Gulf is a far-away issue that only affects governments and big businesses. Our findings show how quickly and how deeply UK small businesses have felt the impact of rising energy and fuel prices in the UK. Businesses that rely on heavy equipment and transport seem to have felt the impact most significantly – as have those enterprises based in extreme points of the UK, businesses that may have bigger transport and shipping costs.”
“Overall, the that fact four in five enterprises cite factors that are holding back business growth is significant. Actual growth forecasts each Quarter have been relatively static for some time. Whilst the vast majority of enterprises started the year working on new initiatives to secure growth, this is counter-balanced by the very high number that are trying to overcome obstacles and external market pressures. Our tracking suggests that if we want to see a major upturn in UK small business growth forecasts for the summer and autumn months, it is the barriers that need to be tackled first – and urgently. Today’s figures on barriers to growth give us an early indication of what to expect from actual growth forecasts for the months ahead.”
About Novuna
Novuna is a trading style of Mitsubishi HC Capital UK PLC, one of the UK’s leading financial services companies, authorised and regulated by the Financial Conduct Authority (FCA) and the Official Finance Partner for British Athletics and Title Partner of UK Athletics and the Great Britain & Northern Ireland athletics team.
With over 2,300 employees, £8.6bn of net earning assets and over 1.3 million customers we provide innovative finance solutions that helps businesses and individuals find the financial edge that turns ambition into achievement. Our business divisions include Novuna Consumer Finance, Novuna Vehicle Solutions, Novuna Business Finance, Novuna Business Cash Flow and our European division specialising in Vendor Finance.
