Research carried out by a bank emphasises the growing confidence among the UK business community, with more than half (56%) of the small to medium-sized enterprises questioned saying the UK economy offers good long-term prospects for business growth, and 97% of respondents planning to invest in growing their businesses this year.
As the survey has been carried out by a bank – Clydesdale & Yorkshire Banks – the result might be seen as good news for companies wanting to finance their growth by borrowing from the banks.
However, Paul Shephard, Director for Business and Private Banking with Clydesdale & Yorkshire Banks, said: "While our research suggests that many businesses are becoming more confident about investing in their future, it is important that we recognise there remain considerable challenges to growth."
He added, though: "SMEs are crucial to the UK economy and its emerging recovery and we will continue to support them in 2014."
The research also showed that almost a third of Britain's small and medium-sized enterprises (SMEs) intend to recruit new staff in 2014, with many of those planning to recruit saying they expect staffing levels to grow by 9%.
On average, Britain's 4.9million SMEs expect to recruit 2.9% more staff this year. That could mean 417,000 new jobs across the UK.
Paul Shephard said: "As the UK economic outlook continues to improve, we are starting to see a positive impact on recruitment plans. Increasing staff numbers can help businesses to boost productivity and competitiveness, and allow expansion into new markets as capacity grows. Creating new jobs is also good for the economy as a whole."
The survey shows that small businesses (10-49 employees) are most likely to grow staff numbers, with 63% of firms in this category saying they plan to create jobs compared with 36% of medium-sized businesses (50-249 employees).Some sectors look likjely to benefit more than others, with more than half of manufacturing SMEs (51%) polled citing plans to take on more people. Recruitment intention was lowest among wholesale and retail traders, with just 9% of those questioned planning to hire.
The research also highlighted considerable regional variation. Job prospects are especially bright in the North East, where 64% of SMEs intend to hire more staff. Recruitment is predicted to be strong in London, where 46% of SMEs signalled plans to increase staff numbers, and the Midlands (44%) and Scotland (43%) followed closely behind.
Just 2% of the companies surveyed said they would cut staff numbers, suggesting that the economic squeeze on UK businesses is loosening its grip.
This online survey of 818 middle managers and above in UK-wide SME businesses was conducted by Opinium on behalf of Clydesdale & Yorkshire Banks from 11 to 21 October 2013. These conclusions were announced on 9 January 2014.