Research published by the Federation of Small Businesses (FSB) shows that 62% of small businesses predict their expansion in the next twelve months.
Productivity in small firms has grown by 1.1% in the fourth quarter of 2014, which the FSB believes is an indicator of wage growth to come.
John Allan, FSB National Chairman, said: ‘All the signs show that as we head into the New Year small businesses are expecting to grow and take on new staff. But to achieve these positive ambitions small firms will need certainty in the domestic economy including interest rates.
‘There are signs that more support could be needed. The perception of increasing cost of finance, and further warnings of a downturn on the continent, demonstrate that Ministers need to continue to do all they can to support small firms’.
The study also found that 16% of small businesses hired more staff in late 2014, while only 11% reduced their staff numbers. Increasingly the cost of finance is obstructing business growth, with 22% of small business citing this as an issue, compared to 11% in the previous year.