The two bodies representing small business have issued optimistic surveys predicting significant growth over the next year. Isme and the Small Firms Association (SFA) both say there is strong positive sentiment in the sector and expect continued new investment and job creation in 2016.
In the SFA survey, 77 per cent of owner-managers say the business environment is improving, with just 4 per cent indicating it is getting worse. It shows that two out of every three firms expect to increase employment this year.
A survey by Isme shows improvement in 10 of the 12 indicators it tracks, with the level of current and future sales at the highest point in the past eight years.
Both surveys suggest small firms are benefiting from a pick-up in the domestic economy. Isme says the recovery might finally be trickling down to SMEs and there is potential for 60,000 more jobs in the sector if costs are curtailed. The SFA survey shows that 40 per cent of businesses highlighted domestic economic growth as the biggest opportunity for their company in 2016. The SFA expects small firms to create 30,000 new jobs this year.
Director of the SFA Patricia Callan said cashflow issues had been identified as a significant risk by almost one in five businesses, followed by rising business costs (15 per cent), economic instability (14 per cent), wage inflation (13 per cent) and legislative or regulatory burdens (13 per cent). ISME chief executive Mark Fielding said focus must remain on competitiveness, with increases in rents, insurance, energy and legal costs all hitting SMEs at a time when profit margins are tight.
Retail sector
Isme said the one negative finding in its survey related to the retail sector, where expectations for employment are now negative, despite a rise in sales and job numbers in the final quarter. Isme attributes this to the imposition of a 6 per cent increase in the minimum wage. Politicians “allow the market to set wage rates.” Mr Fielding said.
Both organisations called for small business to be made a priority in the general election campaign. “Every party must recognise the important role of small business in job creation, enhancing local communities and driving economic progress,” said Ms Callan.
Mr Fielding said that “electioneering politicians” needed to remember that “giveaway rhetoric” influences the business environment and often forces owner-managers to adopt a more cautionary approach to expansion and employment growth.
