There has been a continuation in encouraging statistical information that indicates that the UK is recovering from the economic recession that began in 2008. The figures come from surveys by the British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB).
In its latest Small Business Index, the FMB shows an increasing number of businesses want to create jobs in the next three months. This marks the third consecutive quarter of job creation in small firms and provides yet more signs that confidence is returning and that momentum behind economic growth is being maintained.
The survey of approximately 3,000 businesses showed 15% wanted to take on more people in the coming quarter and 11% have increased staff in the previous three months. In each of the English regions, firms responding have created jobs, with an above average increases in the West Midlands and east of England with 14%.
In addition the report shows a marked improvement in the number of businesses accessing finance, with more firms approved for applications. While the environment remains challenging, this is seen by the FSB as a ‘welcome sign that credit conditions are easing for small firms’.
However, the survey reveals that the perception persists among businesses that credit availability and affordability is poor, meaning more needs to be done to restore confidence in the banks.
“Once again we see confidence on the up and small firms leading the way in job creation,” stated John Allan, National Chairman, FSB. “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, George Osborne, to keep the focus on business.
Nevertheless, Mr Allan believed that small firms could do more, e.g. helping long term unemployed youngsters back to work and as the economy continued to improve, boosting wages for the low paid.
The other survey by the BCC with its quarterly forecast for Q1 2014 has upgraded its growth forecasts for the next two years – from 2.7% to 2.8% in 2014 and from 2.4% to 2.5% in 2015. For 2016 (included in its forecast for the first time) it is expecting growth of 2.5%. If the survey is accurate, the UK’s GDP is expected to be higher than the same quarter in 2008 when the recession began.
But the damage done to the economy from the downturn is a long term one and the survey’s author, David Kern, Chief Economist, BCC, stated: “While service sector output is already now above its pre-recession level, manufacturing and construction will still be below Q1 2008 levels at the end of 2016.”
The British Chambers of Commerce Quarterly Economic Survey (QES) is the largest and most representative independent business survey of its kind in the UK. Each quarter, over 7,500 businesses participate in the QES.
The QES is the first economic indicator of the quarter, published in advance of official figures and other private surveys, and it consistently mirrors trends in official data.