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Confidence bounces back but job creation remains weak, says FSB

Despite confidence among SMEs improving since the end of 2010, new research has shown that employment intentions have weakened within small businesses.

The Federation of Small Businesses’ (FSB) ‘Voice of Small Business’ Index for the first quarter of 2011, reveled that at the end of 2010 a balance of -2.5 per cent of businesses thought they would have to make cuts to their employment levels.

However, -6.5 per cent actually decreased headcount during the quarter – showing that businesses are having to make tough decisions.

The FSB has called on the Government to help businesses by extending the National Insurance Contributions (NICs) holiday to the very smallest businesses.

They believe this would help small firms to take on staff – especially in those areas reliant on the public sector where unemployment is likely to rise further.

John Walker, national chairman, Federation of Small Businesses, said: “The fact that more small businesses had to lose staff in this quarter than they anticipated is a worry – especially as female and youth unemployment both edge towards a million.

“If the Government truly wants the private sector to pick up the slack that its austerity measures create, small businesses need a helping hand.”

The research revealed that looking ahead to the next three months, businesses paint a more encouraging picture with fewer members reporting that they will decrease (-1.7) headcount.

In addition small business confidence rose for the first time to +6.7 in the first quarter, after falling in each quarter in 2010.

This was posted in Bdaily's Members' News section by Ruth Mitchell .