FSB Survey Revealed SME Leaders' Faith In The Economic Recovery
A new survey from the Federation of Small Businesses (FSB) revealed economic optimism for 2014 has risen.
While SMEs were long under extreme pressure from poor exports, lagging domestic demand and a deflated housing market, many of these problems have now been overcome and business leaders believe 2014 will be a good year for growth.
In the fourth quarter of 2013, it was shown that the optimism index has risen to +21.6 per cent, substantially better than in the same period in 2012, when the result was a much weaker -5.6 per cent.
The FSB now predicts that expansion plans and capital investment will be key to further growth in 2014, although some challenges remain.
While analysts argue the UK's lagging housing market contributed to poor economic performance over a number of years, some experts argue the coalition government's landmark Help to Buy scheme has inflated prices and left the nation open to a credit bubble.
But John Allan, national chairman of the FSB, is more positive about the UK's outlook for 2014. The financial expert and SME guru said: "Confidence has been in positive territory for a full year, giving economic growth solid foundations moving into 2014.
"Small firms are creating more jobs and investing in their business and there are encouraging results behind the headline figures, with promising trends evident across the main areas of expansion, investment and employment.
"However a sustained recovery is perhaps some way off as the worldwide economy remains uncertain."
But critics have argued economic growth has not been spread around the UK and some areas' employment statistics reflect a bleaker climate.
A recent study by Experian found there was £31 billion of economic investment from foreign sources in London and the south-east of England in the first nine months of 2013, compared to just £28 million in the north-east of England.
The government has pledged to rebalance the economy and argues infrastructure projects like HS2 will allow for wealth to be spread more evenly.
This is yet more research which has identified that prospects for SMEs are improving and shows that smaller companies must do everything they can before Christmas to carefully plan and prepare to take advantage of opportunities which are likely to emerge in 2014.
"The Government and business commentators in general agree that small businesses have a key role to play in the ongoing improvements being seen in the economy, so now is undoubtedly a time for them to take steps to plan ahead.
"A key part of this is guaranteeing that a quality support network is in place, which includes having access to legal advice which will be necessary as operations and workforce expand. We would urge businesses of all sizes to not ignore the importance of having such provisions in place."
Fergal Dowling - Partner