Job cut backs for small businesses


Despite a small upturn in sales and investment, small businesses are continuing to cut back on jobs, new figures show.

The quarterly survey from the independent Small Business Research Trust (SBRT) found that in spite of slightly more companies reporting increased sales in the second quarter of 2006, three per cent more firms said they were shedding jobs rather than increasing them than in the first quarter of the year.

For three of the quarters of 2005, a higher number of firms reported job losses rather than increased employment, while in just the second quarter, the number of firms reporting increased employment slightly outnumbered those reporting a reduction.

Micro businesses with fewer than ten employees have been particularly prolific in cutting down on jobs, with the number of micro businesses reporting more job reductions higher than those reporting more job creation for every quarter since the end of 2004.

While small businesses are mainly optimistic about the next quarter of 2006 in terms of investment, sales and employment, with 40 per cent expecting sales growth, the optimism is not shared by everyone.

"While our Q2 survey indicates that small businesses have been 'holding up' over the past six months, this 'feel good' factor may rapidly change against a background of increasing energy costs together with inflationary pressures that have now forced the Bank of England to increase interest rates," said SBRT chairman, Brian Wolfe.

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