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March 16, 2012

Small businesses ready to employ again, says FSB

Small firms are ready to hire staff again as recession fears dwindle, according to the latest research by the Federation of Small Businesses (FSB).

The lobby group’s Voice of Business Index, which polled more than 3,000 business owners, found that the number of small businesses looking to take on staff in the next three months was the highest since the summer of 2010, largely caused by firms anticipating a rise in sales and an upswing in business confidence.

“After a period of reducing staff levels, it is good news that the outlook is improving and that they are looking to take on staff for the first time since 2010,” said FSB chairman John Walker.  

The latest survey by Manpower — based on 2,100 responses from employers of all sizes — appeared to echo the FSB’s results, with the recruiting firm saying that the labour market “may have turned a corner”. 

Overall employer confidence in the UK was “positive” after a weak start to the year, according to the poll, with hiring intentions having reached a balance of +2, up from 0 in the first quarter of 2012.

However, small business groups said high unemployment indicated a still uncertain economic outlook, with many businesses reluctant to commit themselves to expansion. 

This month, official data from the Office for National Statistics showed that unemployment rose by 28,000 to 2.67 million in the three months to January. 

The British Chambers of Commerce (BCC) said economic pressures continued to face the UK and the eurozone, and that unemployment figures were “unsurprising” in the current climate.

Commenting, BCC chief economist David Kern urged the Government to do more to encourage the private sector to create jobs and bolster business confidence amongst small firms, such as scrapping the proposed business rates rise in April. 

The Confederation of British Industry (CBI) also called for government action, pointing out that employment had remained “broadly flat” over the past three months.

“With the recovery at a critical stage, it’s vital that the Chancellor uses the Budget to unlock business investment, as only sustainable private sector growth will help tackle unemployment,” said CBI’s director of employment policy Neil Carberry.