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New data from Novuna Business Finance reveals the first green shoots of a potentially new upward trend in small business growth forecasts.
Following a worrying 18-month period since mid-2024, when the percentage of small businesses predicting growth fell for five-consecutive quarters – to a five-year low of 25% – January 2026 sees an upturn, with 27% of enterprises predicting growth for the first three-months of 2026.
Whilst only a slight upturn on the final months of 2025, the new Novuna Business Finance data brings to an end an 18-month slide in growth forecasts, the longest-running slump recorded during the Business Barometer’s 12-years of tracking research.
The new growth forecasts for the first three-months of 2026 follow a previous Novuna Business Finance poll, which revealed that 84% of small business owners were intent on starting 2026 with firm resolutions to work on new growth initiatives for 2026 – a statement of resilience despite the volatile market conditions.
Followed now by actual growth outlook figures for this quarter, the Novuna Business Finance data suggests an organic upturn in small business confidence could be on the cards for 2026, irrespective of the unprecedented geo-political uncertainty.
The Business Barometer tracking study from Novuna Business Finance goes beyond general measures of confidence, and every quarter tracks the percentage of small business owners that forecast tangible business growth.
There were quarter-on-quarter improvements in small business growth forecasts in nine industry sectors, including: manufacturing (27%), construction (22%), retail (32%), finance /accounting (37%), legal services (45%), medical services (34%), transport/distribution (29%), property/real estate (28%) and agriculture (21%). In the manufacturing and transport/distribution sectors, the percentage of small businesses forecasting growth this quarter reached the highest level for 12-months, and there were also 6-month highs recorded in the construction and agriculture sectors.
Growth forecasts for this quarter were stronger among established younger businesses – those trading for less than five-years (41%, up from 32% last quarter). This compares to 20% for older business that had been trading for more than 20-years (down from 22% last quarter).
In terms of the funding profile of various enterprises, small businesses that made use of asset finance (47%) and invoice finance (45%) were more likely to predict growth than enterprises that relied on more traditional forms of finance, including personal investors (34%), friends and family (34%), or Government grants (42%).
Around the UK, the regional picture showed a country split in half, with growth forecasts rising in six regions and falling in five. London continued to evolve as the region where most small businesses forecasted growth this quarter (40%), and the biggest quarter-on-quarter rises were recorded in the West Midlands and Scotland. Conversely, growth forecasts in the East Midlands and North West continued to fall – and in the North East they fell to the lowest level since Spring (Q2) 2024.
Joanna Morris, Head of Insight at Novuna Business Finance said, “Our seasonal research around New Year’s Eve showed a clear statement of intent from UK small businesses for the year ahead.
Despite the unprecedented market uncertainty and their growth forecasts falling to a record low last year, the majority were determined to find new ways to secure growth this year. And now, our new growth forecast data finally shows an upturn in growth forecasts this quarter, after an 18-month period when they were in freefall.
“Whilst this is most welcome news, the picture of Britain being divided into two is a concern. Also, our data over 12-years suggests small business confidence often starts well at the start of a year, only to fall away in the quarters that follow. So, it is too early to say whether the positive news for this quarter is the start of a sustained upward trend.
But for now, it is a positive start to 2026, and we note that those enterprises looking for flexible and tailored funding solutions are also more likely to follow an upward trajectory. This is something we will examine in more detail as the year unfolds.”
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