Small Businesses Forecasting Productivity Gains
Improvements in the market, technology, management and skill levels cited as main reasons for small and mid-sized business optimism
New research has revealed the majority of small firms (63%) predict productivity gains in the next 12 to 24 months.
Businesses predicted an average increased productivity of 9%, with market conditions cited as the main reason (42%), followed by improved technology (13%), management (13%) and skills (11%).
The report, by venture capitalinvestor Albion Ventures, also revealed what industries and regions are most confident in their ability to increase productivity over the next year or two. Manufacturing firms are most assured (74%), whereas firms in the hospitality industry are the least confident at 41%.
In regard to regions, businesses in the North West are the most confident, with 90% forecasting improvements; whereas companies in Scotland are the least optimistic at 44%, followed by Wales at 45%.
The findings come from Albion’s 2014 Growth Report, which involved a survey of 450 businesses, aimed at highlighting the factors that create and inhibit growth among small and mid-sized firms.
Managing partner at Albion Ventures, Patrick Reeve, commented on the report:
“The economic recovery may have resulted in steep falls in unemployment, but so far there has been little movement in the productivity needle.
“This research strongly hints that this is about to change, particularly in key sectors such as manufacturing, driven mainly by favourable market conditions. It is encouraging to see a number of internal factors such as better management and technology also playing a role in encouraging better productivity.”