Lancashire small firms aiming to hire in 2022 if costs are not too great

A Lancashire small business organisation says firms are hoping to take on more staff in 2022

By Tim Gavell
Saturday, 22nd January 2022, 2:05 pm

Most small firms plan to grow over the coming 12 months but are being held back by struggles to recruit, increasing costs and a lack of access to finance, according to the latest full SBI report, from the Federation of Small Businesses.

The study found that half (54 per cent) expect to grow over the next year. The figure is up four percentage points on Q4 2019 when Covid had yet to impact commercial activity.

Close to one in six (16 per cent) increased headcounts in the three months to December, the highest proportion since Q2 2015. A similar share (17 per cent) expects to increase headcounts this quarter.

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Mike Cherry, national chairman of the FSB

With the labour market tightening, six in ten (61 per cent) say they are increasing wages – the highest share since Q4 2019 – and a third (33 per cent) say a lack of appropriately skilled staff represents a substantial barrier to growth.

The latter figure is up 10 percentage points on the last quarter of 2020.

More widely, the share stating that operating costs are rising (78 per cent) has hit a seven-year high. Four in ten (40 per cent) report that gross profits were down over the final three months of the year as inflation erodes margins.

The SBI measure of UK small business confidence fell to -8.5 in Q4 2021, a 12-month low.

FSB national chairman Mike Cherry said: “After two years of turmoil, in which firms have once again shown their adaptability and resilience, the small business community stands ready to spur our economic recovery. The majority intend to grow over the coming 12 months, and many are looking to increase headcounts.

“Their optimism is, however, hampered by spiralling inflation, labour shortages and looming tax grabs. Come April, they’ll be faced with a jobs tax hike, an increase in dividend taxation and fresh business rates bills.

“We urgently need the Government to start looking closely at the policies that will empower the small business community to spur our recovery from this recession as it did the last. The growth intentions are there, but we need the right support to turn vision into reality."

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