Financial News

  • 17 December 2013, 12:00

Small Business: More Jobs As Confidence Soars

More than half of Britain's small businesses say they plan to expand in 2014 amid surging confidence in the economy.

Some 56% of firms hope to grow moderately or rapidly in the next 12 months, according to the Federation of Small Businesses (FSB).

Its Q4 2013 survey found confidence among business owners was up 21 points, with those in the East Midlands most upbeat about their prospects.

Confidence was especially high among small firms offering financial services, as well as those in computing, business services, manufacturing and real estate.

Meanwhile, the number of small businesses applying for credit in the past three months fell to 16% - its lowest level for two years.

About a third (32%) of companies are running at full capacity, while one in 10 have more work than they can handle.

Although only 1% of firms increased staffing levels in Q4, 3% plan to increase their head count in Q1 2014.

Rob Harbron, a senior economist at Cebr, said the survey pointed towards an "optimistic trend" that lays "solid foundations" for economic growth next year.

"Turnover growth is increasingly buoyant and profitability has increased for the first time since the data series began," he said.

"Particularly promising trends are being seen in business intentions for the coming quarter and year.

"Small firms plan to increase headcounts for the third consecutive quarter.

"This follows three-and-a-half years of reported reductions and should help to bring UK unemployment down towards the 7% level that has not been touched since early 2009."

However, John Allen, national chairman of the FSB, warned the UK economy still has "long-term structural problems", including skills shortages and ill-functioning markets in banking and energy.

"Tackling skills and work-readiness should be an absolute priority for the Government as recent headlines show the UK risks lagging behind competitors in emerging markets, and there remains the outstanding issue of fundamentally reforming business rates," he said.

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