SMEs look to hire staff after positive growth
Following this promising start to 2022, 40% of SMEs plan to hire an average of six new employees before the end of March, according to the Barometer.
Barclaycard head of small businesses Colin O’Flaherty said: “Small and medium-sized businesses have had a positive start to the year and it’s encouraging to see so many seeking to add to their workforce.
“SMEs are also remaining resilient by continuing to focus on areas within their control, such as by improving their operating models to overcome the hangover to supply chain disruption which peaked at the end of last year.
Spirit for innovation
“The coming months will no doubt present continued challenges for British SMEs and the impact of rising costs will remain front of mind. Businesses will need to call on the same spirit for innovation and specialised support that has propelled them through the last two years.”
Data from Barclaycard Payments, which processes £1 in every £3 spent in the UK and services over 350,000 SMEs, showed transaction volumes were up 42.3% for the last three months of 2021, compared to the same period in 2020.
Despite concerns around economic uncertainties, almost three fifths (58.1%) of SMEs expected an increase in revenue this quarter compared to the period last year, when the UK was in the third Covid lockdown.
Year-on-year payments volumes also demonstrated a feeling of confidence among SMEs across the UK, with leisure and entertainment and food and drink businesses having seen an increase by 471.0% and 110.8% respectively.
However, almost two thirds of SMEs (64.6%) were worried about the rise in the cost of living and inflation, which was selected as the number one challenges for businesses this year, while a similar amount (66.6%) highlighted a feeling of nervousness regarding increases in energy bills, with 39.4% having stated it will impact their ability to remain competitive.
Perfect storm
Green & Black co-founder and SME investor Jo Fairley said: “The strong start to the year for British SMEs who are looking forward to an average anticipated uplift of 13.5% in earnings over Q1, is really great news.
“But it comes at a time where two thirds are also acutely aware of the challenges posed by the rising cost of living, inflation and energy bills – potentially a perfect storm.
“From my own experience running multiple ventures, I know all too well trying to weather economic turbulence while growing a business can be daunting on top of the day-to-day fire-fighting.
“Nevertheless, the last couple of years have shown the British consumer is keener than ever before to support smaller and local businesses, and this should prove really positive for SMEs, helping them not just to cope but go grow in the months ahead."