Businesses plan hiring spree on UK’s recovery

HIRING and investment spending are set to take off during the rest of this year, with small firms at their most confident in five years, according to a survey published today.

Lloyds’ business confidence index rose to 30 per cent, up from 19 per cent at the start of 2013, as the economic recovery gets underway.

That shows the index smashing through its long-term average level of 21 per cent for the first time since the financial crisis took hold in 2009.

Companies are increasingly upbeat on the economy, with 41 per cent of businesses stating that they are more optimistic than they were only six months ago – the strongest figure since 2009.

And 38 per cent of businesses forecast a rise in profits over the next six months – an upbeat attitude that is likely to translate into more jobs and investment.

More than one-fifth of small- and medium-sized enterprises (SMEs) plan to increase their workforce, far outweighing the nine per cent who expect to cut staff.

And 22 per cent plan to increase capital investment, showing an acceleration from their plans in January and outweighing the 16 per cent planning cutbacks.

The surge in confidence and optimism reinforces hopes that the economy is recovering.

Britain’s GDP has bounced back from a fall of 0.7 per cent in last quarter of 2012 to expanding 0.3 per cent in the first quarter of 2013 which has proceeded to boost hopes further.

“Businesses are feeling more bullish about their future trading prospects as the economic recovery begins to gather pace,” said Lloyds’ chief economist Trevor Williams.

“It is encouraging to see that businesses are beginning to invest more, as this will give them the competitive edge that is required to compete on an international level.”