Business confidence has hit a 20-year high, according to new research, which points to a potential jobs boom this year as firms look to grow.
Lloyds Bank surveyed 1,501 businesses across the UK for its report last November and found that 70 per cent of respondents had turnover below £10m, with the remaining posting sales either between £10m and £25m (14 per cent) or more than £25m (16 per cent).
The responses create a Business Confidence Index (BCI) which measures respondents' expected sales and profits for the coming six months as well as their more general outlook. The BCI for the next six months stands at 45 – the highest for 20 years and well above the average score of just over 20.
About two thirds of companies are more optimistic than they were six months ago, with only nine per cent saying they are less optimistic.
The number of business expecting to take on new staff in the next six months stands at a six-year high after a five percentage point rise on last summer's survey. More than a quarter of firms said they planned to boost the number of new recruits they sign up, with 10 per cent admitting to planning reductions.
Last week, recruiters working in the channel said they expected a boost in business this year as more firms dust themselves off from the recession and begin to invest in staff again.
Earlier on today, chancellor George Osborne pledged to support businesses as he claimed the government's economic improvement plan was working.
Despite the overall positivity of Lloyds' findings, the business and services sector was the least confident of all sectors surveyed. Lloyds' BCI for the sector stood at 42, below the average of 45, and exceeded in the pessimism stakes only by the construction industry. The manufacturing sector was most optimistic about the year ahead, posting a massive score of 57 on the BCI.
According to Trevor Williams, chief economist at Lloyds Bank Commercial Banking, the report shows promising signs for the UK economy.
"Businesses are now much more confident about their future trading prospects and they have a healthier appetite to invest, which is a sign that growth may be sustained into next year," he said.
"The renewed confidence in recruitment prospects suggests that employment is set to rise further as economic activity picks up."
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