Confidence high among small firms
But employment plans remain low
Small business confidence has bounced back, according to the latest quarterly survey by the Federation of Small Businesses (FSB), though many still face difficult recruitment decisions.
The FSB’s ‘Voice of Small Business’ Index, which analysed the first quarter of 2011, revealed that the number of small firms planning to create jobs had fallen – despite an improvement in business confidence since the end of 2010.
At the end of last year a balance of -2.5% of businesses thought they would have to make cuts to their employment levels. However, -6.5% actually decreased headcount during the quarter, suggesting that businesses have to continue to make tough decisions.
John Walker, national chairman at the FSB, says the government needs to give small businesses “a helping hand” to help the economy return to growth.
He added: “At the end of 2010 the feeling across the country was very downbeat as businesses lost confidence, having to deal with a rush of challenges from the impending rise in VAT, to the economy dipping back into negative territory. This continued into 2011 as fuel prices increased and inflation affected spending power.”
The FSB has called on the government to help businesses by extending the National Insurance Contributions (NICs) holiday to the very smallest firms, which it says would help them take on staff in areas reliant on the public sector where unemployment is likely to rise further.