British SME businesses plan to expand their workforce, leading Britain’s continued economic recovery
The confidence of Britain’s medium-sized businesses remains strong and they plan to expand their workforce in the next quarter, as well as in the following 12 months, reveals the new Vistage Medium-Sized Business Confidence Index published today.
The research is based on responses of 431 CEOs, managing directors and owners of largely medium-sized and larger-small businesses, conducted in summer 2014.
The results of the survey provide further evidence that the performance of the mittelstand sector underpins the recovery of the British economy. The data closely reflect the statistics and the growth patterns published by the Office of National Statistics on 3 September 2014.
Key findings
• About 60% SME business owners expect the economic conditions in the UK to improve over the next 12 months. 75% of survey respondents expected that to be the case In the first quarter of the year, which is in line with the ONS assessment that the pace of the economic growth is levelling down since the end of 2013.
• Nevertheless, 76% of respondents confirm that economic conditions in mid-2014 are a marked improvement on the situation 12 months ago.
• There is also continued good employment news from medium-sized businesses – a dynamic and successful part of the UK economy – with 67% of managing directors and owners aiming to expand their workforce in the next 12 months. This is a 3% increase on the result of the previous quarter. Only 28% have no plans to increase the number of their employees.
• Their confidence comes particularly from strong sales forecasts, with 80% expecting that their sales revenues to increase over the next 12 months. Moreover, 62% believe that their profitability will also grow. The figure for Q1 2014 was 71%, reflecting the ONS statistics.
• Importantly, according to the majority of the survey respondents, this growth will not come as a result of price discounting. The majority (53%) expect their prices will remain the same, with only 5% owners anticipating price reductions (while 39% expect that they will increase their prices – up from 35% in Q1 2014).
Steve Gilroy, CEO of Vistage, said: “Our research shows that Britain’s mittelstand business owners are a driving force of Britain’s sustained recovery and this confidence is translated into their intentions to expand their workforce in autumn 2014.”
Steve added: “The results of the survey are closely aligned with other recent leading reports, such as the statistics last week from the Office of National Statistics. Together they show decisively that SME businesses are growing and are confident about the near-term future: it would be a tragedy if this was derailed by external problems, such as Russian belligerence, or self-inflicted political turmoil from the impending Scottish referendum.”
