Small Firms Well-Placed To ‘Drag UK Economy Out Of The Doldrums’ - TS Partnersby Liz Seyi Digital marketing manager
Much of the conversation around the UK economy lately has focused on how businesses are mounting a recovery from the worst of the COVID-19 pandemic, at the same time as being buffeted by rising costs. Sure enough, a recent story from City A.M. has suggested that small firms are “set to drag the UK economy out of the doldrums”.
The business-focused newspaper said it had been shown “exclusive research” suggesting as such, with the rapid recovery of small businesses in London pushing up a closely watched indicator measuring the small business economy’s health.
A continued resurgence for small businesses, despite cost pressures
City A.M. explained that the small business index of the cloud-based accounting software provider Xero reached a 19-month high in October, hitting 95 points. This suggests that small firms have made a sterling recovery from their considerable lows during earlier stages of the pandemic.
Glen Foster, director of small business and accounting partners at Xero, commented: “It’s encouraging to see positive signs of small recovery, with wages and jobs moving in the right direction and beginning to reflect the resurgence of the economy.”
According to the newspaper, staff levels at London small businesses went up by 2.5%, while the wages of employees of small businesses across the UK saw a 2.7% increase, largely driven by the media and telecommunications sectors.
Such positive data indicates that small firms may be especially well-positioned to help power the British economy back to its state of health before the coronavirus outbreak.
Price worries, however, remain very real
As encouraging as the above development undoubtedly is, there have also been several major surveys in recent months indicating that UK firms are continuing to have to deal with an elevated cost burden.
Statistics from the Chartered Institute of Procurement and Supply (CIPS), for example, have suggested that in October, costs went up at their steepest rate since January 1998. Meanwhile, data released by the Confederation of British Industry (CBI) in late November indicated that a record level of factories in the UK are getting ready to put up their prices.
The CBI added that November had seen a 16% decline in stock levels, which was the biggest ever recorded drop. In better news, however, order growth heightened significantly.
Xero observed that small firms were also subject to these headwinds, with Foster stating: “Many are struggling with supply chain issues, rising costs”.
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Simply enquire to our team today for further information on the assistance we can provide to enable your own small firm to keep on top of its finances and power itself to recovery.
Created on Jan 20th 2022 06:30. Viewed 129 times.