Members of the UK200Group comment on news that SMEs are recovering from recession
Members of the UK200Group of independent accountancy and law firms have today commented on news that the UK’s SMEs are recovering from recession, with growth and start-up rates returning to pre-crisis levels. At its annual State of Small Business Britain conference held in Birmingham this week, the Enterprise Research Centre (ERC) highlighted that the dynamism of ‘small business Britain’ is now at the highest level since before the start of the economic crisis in 2008. The Centre stated that the private sector in the UK shed 5.7 million jobs between 2008 and 2014 from almost one million SMEs that folded over this period. A further 7.3 million jobs were cut at firms that survived, making a total of 13 million jobs lost overall. However, this loss has now been made up, with new start-up companies creating four million jobs and the expansion of existing firms adding a further 9.4 million; giving a figure for net private sector job creation between 2008 and 2014 of 400,000.
Duncan Montgomery, Tax Partner at UK200Group member firm Whittingham Riddell LLP, said: “These figures make great headlines but bear no relation to reality on the ground. In order for them to be right almost one in two of the UK workforce was the subject of a job cut and re-employed in the same period. That simply has not happened. Perhaps the headlines are not matching the data as analysed. The Office for National Statistics puts the UK job market at 30 million employed people. Very few businesses went under in the recession that actively cost jobs. Certain sectors are consolidating, but by no means should we have a doom and gloom view of the last recession.”
Jonathan Russell, Partner at UK200Group member firm ReesRussell, said: “This report is a little at odds with my experience; certainly of microbusinesses and especially those reliant on the retail customer. There is a degree more optimism but those who have the general public as the ultimate customer are reporting that sales have been down significantly over the last six months. Margins have been further squeezed and even then sales volumes are down. It is as if the retail customer had their final fling before Christmas and has since then run out of money to spend on anything but essentials. The slightly larger businesses almost certainly included in this survey are seeing increased activity and margins starting to return but are now being hampered by a shortage of staff.