SMEs upbeat over growth prospects

Monday 6 January 2014

Limited company accounts are likely to be healthier this year, as the economy strengthens and demand for services increases.

Indeed, many small and medium-sized enterprises (SMEs) in the UK are now upbeat about their growth prospects this year.

This will also lead to job creation and more opportunities for contractors. Clydesdale Bank surveyed more than 800 UK SMEs about their prospects for 2014 and found that the 4.9 million companies in the country intend to recruit 2.9 per cent more staff, creating around 417,000 new jobs.

Companies with fewer than 50 employees are the most likely to expand their workforce, with 63 per cent indicating they expect to add staff in the months ahead.

Medium businesses (between 50 and 249 employees) are slightly more cautious, with just 36 per cent intending to recruit in 2014.

Alan Young, regional director for business and private banking with Clydesdale Bank in the East of England, said: "While our research suggests that many businesses are becoming more confident about investing in their future, it is important that we recognise there remain considerable challenges to growth.

"Access to funding is crucial to achieving growth aspirations. SME’s are crucial to the UK economy and its emerging recovery and we will continue to support them in 2014."

There are considerable regional variations when it comes to confidence too. The north-east is the most likely to see recruitment efforts intensify, with 64 per cent of SMEs intending to hire more staff.

London will also see conditions improve, with 46 per cent of companies planning to grow their workforce. In the Midlands, 44 per cent of SMEs expect to hire, while 43 per cent of Scottish companies intend to grow.

Accounting and manufacturing industries are the most confident about the coming 12 months it would appear, with many of the opportunities set to be created over 2014 located in these sectors.

Indeed, 53 per cent of accounting SMEs and 51 per cent of manufacturing companies hoping to hire.

Wholesale and retail traders have the weakest recruitment intentions, with just nine per cent intending to take on new staff.

Meanwhile, it was observed that while 58 per cent of UK businesses don't intend to create new jobs this year, only two per cent will shed staff, meaning economic conditions are improving.

This correlates with findings from the Recruitment and Employment Confederation (REC), which showed that the strengthening economy is seeing demand for contractors improve.

"At the beginning of 2013 the REC/KPMG Report on Jobs showed 14 areas of skill shortage and as we start 2014, the number has risen to 47 and is accelerating month on month," the body said in a statement.

This has created an environment in which candidates are in the driving seat, making the most of the strengthening economy. Indeed, it is expected GDP will grow by over two per cent.

"We are re-entering a candidate driven market. Successful recruiters in these markets will need to develop content that attracts this scarce talent while then building meaningful relationships that keeps the talent close," the REC explained.

By Victoria McDonnell

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