Almost half (46%) of SME food and drink manufacturers surveyed intended to recruit new staff over the next 12 to 18 months, according to new data from Clydesdale and Yorkshire banks.
On average, the sector expected to grow staff numbers by 3.7%, which could boost the current 1.2M SME workforce by 38,000, they said.
Not only were food and drink SMEs going to recruit more staff, but 38% of those asked said they were also prepared to spend over and above their existing budgets in the coming year to do so, the banks said.
Invest in staff
Companies were also planning to significantly invest in staff development, with one in three of the 1,168 SMEs asked, saying they were prepared to budget for their staff’s training and development.
“Food and drinks SMEs are now planning for growth and their desire to increase recruitment and invest in their staff is a clear sign that confidence is building within the sector,” said Chris Archer, head of food and drink at Clydesdale and Yorkshire banks.
“The creation of new jobs will help boost productivity and competitiveness as well as strengthening the improving economic recovery."
The food and drink sector was also more optimistic about the UK’s economic prospects and 59% of food and drink SMEs said they expected the economy to grow, Archer said.
More than half (57%) of the food and drink firms asked also said they expected their turnover to increase in the next 12 to 18 months.
‘Set for recovery’
“Businesses in the food and drinks industry were particularly affected during the recession, but they now look set for recovery as more than half are set to increase turnover in the next 12 months,” said Archer.
“As confidence continues to grow, we remain focused on supporting SMEs in the sector and investing in their growth ambitions.”
However, figures highlighting the positive growth of food and drink SMEs follow a spate of negative press, suggesting the sector was struggling to receive financial backing.
Banks were allegedly restricting SMEs growth by not offering them the finance they needed – even if they had secured retail contracts – figures from an Office of Fair Trading report showed in March this year.
The figures also showed a drop of £0.3bn in small business lending in January this year.
Nearly 50% of bank loan applications failed and SME overdrafts accounted for £14.2bn in November 2013, said the financing firm SME Invoice Trading.
Food and drink SMEs in numbers:
- 1.2M people are employed by SMEs
- 98% of food and drink businesses are SMEs
- 40% of those working in food and drink work for an SME
- 45% of bank loan applications fail
- £14.2bn – the total of SME overdrafts in November 2013
- 69% of SMEs surveyed by Fleximize said it “was very difficult or difficult” to get a loan
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