North East missing out on upturn for business

Small businesses are creating jobs for the first time in at least three years – though the North East is bucking the optimistic trend

Spending chiefs have urged the creation of a new £200m fund to help SMEs

Small businesses are creating jobs for the first time in at least three years – though the North East is bucking the optimistic trend.

The Federation of Small Businesses (FSB) said its confidence index rose to 33.5 in the third quarter, double the score in June and representing the third successive quarter of growth.

For the first time since the report began in 2010, more firms are looking to take on staff than reduce their workforce, while the number of firms intend.

Financial and business services, as well as technology firms, reported the highest levels of confidence, although those in the leisure and entertainment sectors were less optimistic as household spending power remains squeezed.

FSB chairman John Allan said: “Optimism, growth and confidence can be used to summarise this quarter’s findings. Small firms are clearly helping the economy gain momentum compared to the same point last year.”

Optimism picked up in nearly all regions, but London’s score of 46% contrasts with much lower levels in northern regions and a decrease in the North East.

FSB members reported that inflationary pressures have eased as just over 60% said that the cost of doing business had increased in the quarter, below the peak in late 2011 of 75% and below the last three quarters.

The FSB, which has around 200,000 members, said 2,330 firms participated in the survey.

Mr Allan added: “This is the most positive report that the FSB has published for some time and gives further confidence that steady growth is back on the agenda.”

A Treasury spokeswoman said the survey was more evidence that the economy is turning a corner.

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