The annual Barclays Business Regional Impact Index launched yesterday, reveals which regions in Britain benefit most from the contributions of their small businesses and crucially, the role they are playing in boosting recovery across the country. Despite a challenging environment for entrepreneurs in 2011, which has delivered an interesting shift in this year's Index, Central England has jumped up four places to fifth in the Index.  Factors contributing to this increase include using local suppliers, improving proportion of overseas customers and a confident outlook on growth.

The Barclays Business Regional Impact Index, in its second successive year, is based on an in-depth study of around 1,000 owner-managers, combined with qualitative analysis by Kingston University's Small Business Research Centre. The study ranks each region on 13 key indicators including outlook on growth, employment generation, and expected profit. 

This year's Index reveals a complex picture. Nationally, small businesses have 'battened down the hatches' following a difficult year. Looking ahead to 2012, they remain cautious compared to last year - 49 per cent have ambitions to grow compared to two thirds (66 per cent) in 2010.  Almost half (49 per cent) expect an increase in profit during 2012, while a third (33 per cent) expects profits to remain static.

Encouragingly, owners of small businesses still retain a good sense of optimism and are looking to innovation to help boost their business in 2012. Over a third (37 per cent) of British small businesses looking to grow next year see innovation as the key driver, while 25 per cent of businesses are doing more with less next year. Only 15 per cent expect to take on new employees to help deliver growth.

Neil Fewtrell, Regional Business Director said: "The current economic climate continues to have an impact on many small businesses in Britain.  Confidence remains low and clearly businesses are cautious as we approach 2012, with job creation not being a priority in the short-term. However, Central England has improved its ranking in the Index this year in comparison to other regions, which places it in a stronger position to pull through the recession and benefit from the economy.

"It is encouraging to see this optimism in Central England, with small businesses being confident with their outlook for growth next year.  As well as increasing their use of local suppliers, small businesses in the region have concentrated on local employment, increasing headcount by 14 per cent - far higher than the national average of 4.5 per cent.

"We are committed to doing everything we can to ensure business owners receive the support they need to help deliver growth next year. Improving confidence is critical, as we look to help businesses to succeed in 2012."

The Index reveals that in Central England:

• Small businesses outlook on growth is comparatively more confident this year, rising seven places to joint second with the North East. More than half (54 per cent) of Central England small businesses expect to see growth next year

• 63 per cent of small businesses supplies come from firms in the region, placing them at the top of the Index for local sourcing

• Almost 10 per cent of customers come from overseas, rising two places from last year to fourth place. These firms are bringing foreign currency to Central England

• Small businesses have created nearly four new jobs in the last three years, increasing headcount by 14 per cent.  This is far higher than the national average of 4.5 per cent, attributing to their rise from tenth to fourth in employment growth

Commenting on the findings, Professor Robert Blackburn, Small Business Research Centre, Kingston University who developed the Index said: "In terms of regional performance, the Barclays Business Regional Impact Index shows that SMEs in the North East are proving to be the most resilient in today's tough economic climate.  However, Central England has improved its ranking in many of the 13 key indicators, rising to fifth place overall.  Its improved position could be down to a positive outlook for growth and increased employment, however small businesses in Central England also need to focus on their ability to innovate.  

To help business seize opportunities for growth, Barclays will be running free 'Boosting Business' Seminars on the 7th and 9th November, with 9 nationwide locations to choose from.  The seminars are aimed at businesses that are thinking about attracting new customers, using mobile technology or exporting. Attendees will hear from key note speakers and have the opportunity to talk to local entrepreneurs.