Confidence among the UK’s small business is returning, with more businesses planning to hire new staff in the next three months, says a new survey.
The Federation of Small Businesses’ (FSB) latest Small Business Index shows that an increasing number of firms plan to make new hires in the next three months. According to the FSB, this is the third quarter running that small firms have continued to create new jobs and suggests that the momentum behind economic growth is sustainable.
The poll which surveyed around 3,000 firms found that 15% of companies want to take on more staff in the next three months and that 11% raised staff numbers in the previous quarter. Job increases were seen in all the English regions, but the most were seen in the West Midlands and the east of England, which saw increases of 14%.
In a separate report, the latest Lloyds Bank purchasing managers’ index report revealed that the West Midlands, followed by the South East and London, enjoyed the fastest growth in business activity in January.
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According to the FSB, its business confidence measure also hit 35.7, breaking its previous record score of 33.5 seen in the third quarter of 2013.
The report also shows that more small firms are successfully securing bank finance, with more applications approved, although it also noted that small business owners continue to believe that credit available is poor, suggesting that the banks need to do more to restore confidence.
Nearly two thirds of small companies said they expect to grow in the next year, while 25% expect to increase the amount of money they invest in their business. More companies also said that they expect profitability and turnover to improve in the next quarter.
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"Once again we see confidence on the up – and small firms leading the way in job creation,” said John Allan, National Chairman, Federation of Small Businesses.
“There is no doubt small businesses are pushing us further towards economic prosperity and it's so important to retain this momentum. That more than half of firms want to grow is a sign to the Chancellor to keep the focus on business.
"I believe small firms can do more too – for instance helping long term unemployed youngsters back to work and as the economy continues to improve, boosting wages for the low-paid.
“With more businesses planning to invest, this can only be good news for the economy and the Chancellor needs to build on this in the Budget."
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