UK small businesses enjoyed higher sales in the second quarter of this year than at any time since 2004, new research has found.
According to findings from the Small Business Research Trust (SRBT), 43% of smaller firms reported increased sales during the second three months of 2007, compared to 26% who experienced falling sales.
However, employment growth does not follow this trend, with the number of firms saying they have increased employment being only slightly higher than those who have cut jobs.
Mark Berrisford-Smith, senior economist at HSBC, which sponsored the research, said that it has been a good period for small businesses, with the backdrop of a robust economy. But, he warned, ‘with interest rates likely to rise one more time, conditions will get tougher in the closing months of the year’.
Brian Wolfe, chairman of the SBRT, said that the conservative approach towards recruitment demonstrated by smaller firms may benefit them if the recent adverse weather and financial market turbulence cause a downturn in sales.
He added: “I suspect that a cautious approach to business will be appropriate during the second half of this year until we see how the country copes with the outcome of the terrible weather and the instability of the financial markets.”
Investment in small firms was also strong in the second quarter, with about 10% more firms saying it was up rather than down, making investment figures for the first half of 2007 better than at any time since the third quarter of 2004.
© Crimson Business Ltd. 2007
