SFA survey shows improved job prospects

The 10th annual Small Firms Association (SFA) employment survey shows that the mindset of small business for 2004 has improved in employment prospects.

This more optimistic outlook means that small businesses will create 36,238 new jobs in 2004 as demand for labour increases by 5.6%.

"This is a remarkable turnaround from 2003 when employment prospects dropped to a 10-year low at just 2.7%," commented Pat Delaney, SFA director.

The corresponding figures were 6.5% in 2002, 7.8% in 2001 and 10.9% in 2000.

Among the key findings in today's survey were: 46% of companies have vacancies, 63% of companies are more likely to expand their business in 2004, 55% of companies cite a lack of skills as a problem to creating jobs, demand for foreign workers is up 9% and wage expectations have moderated since 2003.

"These results reverse a five year trend of falling labour demand and demonstrate that small business will respond to more positive market conditions. A benign budget, lower interest rates, some wage moderation and lower inflation have all contributed to putting small business back into a mindset of investment," said Delaney.

Wage expectations have begun to moderate since 2003 and 46% of companies have current vacancies.

Over the past year 19% of companies have made staff redundant but that figure is set to fall to 8% overall this year, although the figure is higher in the manufacturing sector at 12%.

11% of companies state that they will place employees on shorter worker weeks or have short term lay-offs over the coming year.

The manufacturing and retail sectors show a greater exposure in these areas at 20% and 25% respectively.

The demand for skilled labour among respondents has increased to 21% of companies in 2004 from 17% in 2003.

However, lack of skills was cited by 55% of respondents as a difficulty in filling vacancies. Demand for general operatives has fallen to 13% from 19% in 2003.

Demand for IT staff has increased to 4% from just 1% in 2003.

Demand for administrative staff is strongest in the services and distribution sectors at 30% and 20% respectively.

The survey also shows the labour market has become more flexible.

There has been a 12% increase in the number of companies who would recruit foreign staff in the event of having future vacancies.

Of those companies who have filled vacancies in the past year there has been a 68% increase in recruitment of foreign workers.

Looking ahead, Delaney said: "The tourism sector will recover this year and there are fewer threats emerging from international conflict.

The survey was carried out in the first quarter of 2004 and 1055 companies responded.

The questionnaire was distributed to a sample 3,500 of the SFA's 8,000 member companies.