Small businesses continue to grow

Thursday 3 March 2016

Deciding to start your own business can pose a number of challenges, and knowing when it's wise to grow and when it's best to remain constan is one of the biggest and most pressing problems for SMEs.

A new report from human resources management company ADP has shown that confidence is still strong among small businesses, with many choosing to expand their workforce.

In its monthly jobs report, produced in partnership with Moody’s Analytics, the firm found that job growth among smaller firms continued to rise across February. This has sparked suggestions that this positive trend will carry on throughout 2016.

According to the figures, companies with less than 50 employees created a total of 76,000 jobs in February, which accounts for more than a third (35 per cent) of the entire job market growth.

It is also the same number as the level of hires made by larger companies with over 500 employees.

In comparison, businesses with under 20 employees took on 37,000 new workers, while those with 20 to 49 employees hired 38,000, the report states.

According to Mark Zandi, chief economist at Moody’s Analytics, there are many reasons for this boost in confidence among the self-employed, and the pace of job growth is double what is necessary to absorb the increase in the number of people looking for work.

He said for the first time in a decade, the economy is back to full employment, meaning that everyone who is looking for a job should be able to find one.

Mr Zandi explained that there were three key factors contributing to the sustained growth. The yuan becoming much more stable in China, a bottoming out of oil prices and steady financial market conditions were all having an impact on jobs.

“It was expected that recent volatility in the global financial markets would have resulted in fallout in the economy, but that has not been the case,” he said.

Although sectors such as energy and manufacturing are struggling, all other industries are continuing to experience growth.

The report suggests that the economic climate is good for those small businesses looking to grow and expand their workforce.

By Victoria McDonnell

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