Confidence is growing among UK contractors, as a new report finds that over half of smaller sized businesses expect to grow in the New Year.
Research from the Federation of Small Businesses (FSB), revealed that three in five (62%) of smaller sized firms, such as Limited companies, expect to grow their business in 2015.
Despite figures showing that confidence is slightly less than in previous quarters, small business owners are still expecting to hire additional staff, increase exports and grow their company within the first quarter of the News Year.
Small firms’ productivity grew year-on-year in the second half of 2014, rising by 1.1% in the fourth quarter of the year. This is an encouraging sign for the both economy as a whole and workers in particular, as wage growth is typically linked to productivity increases.
John Allan, FSB National Chairman, said, “All the signs show that as we head into the New Year small businesses are expecting to grow and take on new staff. But to achieve these positive ambitions small firms will need certainty in the domestic economy including interest rates.”
The FSB states that the ‘importance of continued Government support thorough schemes such as Funding for Lending is vital, with nearly a quarter of businesses (22%) reporting the cost of finance as a barrier to growth, compared to 10% a year ago. The situation is most acute for the smallest firms. Only 11% of small businesses without employees report that they find new credit affordable, compared to 44% of those with 51 or more staff’.
John Allan added, “There are signs that more support could be needed. The perception of increasing cost of finance, and further warnings of a downturn on the continent, demonstrate that Ministers need to continue to do all they can to support small firms. Building on extensions to schemes like Funding for Lending, the Employment Allowance, and recently improved business support programmes are crucial to this.”
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