Small and medium-sized businesses are driving hiring rates and growth, according the Confederation of British Industry (CBI)
According to the CBI’s most recent SME trends survey, small and medium-sized businesses reported a strong rise in domestic orders and output for the fourth consecutive quarter, with further growth anticipated over the next three months.
Additionally, the number of people employed by SMEs increased dramatically, with 34% of firms questioned saying that their businesses’ employment levels had increased. This is compared to just 9% reporting a decrease.
Katja Hall, CBI deputy director-general, said that across the sector, businesses were performing well despite exports being hampered by the sterling’s strong position.
Hall said, “Smaller manufacturers are settling into a regular growth pattern, with their order books and output growing for the fourth consecutive quarter.
“But export orders have underperformed this quarter, which may in part be because of the strength of sterling.
“We need the government to get behind our small and medium-sized manufacturers to help them to sell their products and services to new markets around the world, giving a sustainable boost to long-term growth.”
Recruitment firm Astbury Marsden also reported that SMEs were outperforming big investment banks when it came to increasing levels of recruitment.
The firm said that July saw the creation of just 2,000 jobs in the City of London, down 8% on June – where 2190 new jobs were created – and down 7% on July 2013, when 2,150 jobs were opened.
SMEs are becoming more attractive to investment bankers as large firms have come under increased scrutiny over remuneration issues, according to Astbury Marsden’s associate director, Adam Jackson.
Jackson said, “Other than compliance, risk and technology staff, hiring at the investment banks remains modest.
“For the time being, new front-office hiring is more often than not to replace departing staff, rather than supporting new growth.
“High frequency and algorithmic trading firms are especially active, taking on technology and infrastructure staff from the investment banks as the banks wind down their proprietary trading activities.
“Smaller City firms don’t have the same restrictions on remuneration that the large investment banks do. For the bigger firms there is intense scrutiny of the rewards for top staff.”
Hiring intentions at six-year high
Recruiters to make more permanent hires
Demand means employers keep staff
Employment growth set to slow