The Courier & Advertiser (Fife Edition)
Job cuts continue across small firms
September brought t h e s e v e n t h consecutive month of job cuts for small businesses across the UK, despite a modest uptick in demand, according to newly released data.
The Royal Bank of Scotland PMI report, which monitors the performance of private sector firms with fewer than 49 staff, showed UK small businesses saw a c t i v i ty rise again in September as demand showed further signs of picking up following the record downturn in the spring.
Rising housing market activity, the reopening of manufacturing supply cha in s and s tock replenishment were all factors contributing to the steady rise in output levels among small businesses across the period.
How e v e r , sm a l l businesses continue to trail behind their larger counterparts of recovery.
Small construction firms s aw a third straight monthly improvement in act iv ity mark ing a sustained recovery in output levels following the record downturn during the second quarter.
Despite small building companies reporting a boost to activity from house building and general proper ty de velopment, their growth performance was slightly sub-par compa red to the construction sector as a whole.
The data also shows small UK construction companies facing intense competition for new work amid some repor ts of overcapacity in the sector.
T he y repor ted lower order book volumes for the second month in a row in S ep t emb e r wh i l e employment at small building firms fell for the in the speed eighth month in a row, although small enterprises also showed less willingness to cut payroll numbers than the i r la rge r counterparts.
In manufacturing, small businesses recorded a further increase in output dur ing Sep tember , although producers with fewer than 50 staff recorded a notably softer expansion in output than large manufacturers.
Small goods producers also saw another sharp reduction in staffing levels, w i th redundanc ies frequent ly cited by manufacturers, reflecting concerns about the longerterm demand outlook.
Ve n d o r performance deteriorated for the 13th s tra igh t mon th in September, with lead times lengthening to the greatest extent since June.
According to survey responden ts , s tock shortages and logistics issues were more common among suppliers during September and stretched supply chains contributed to a further increase in cost burdens faced by small manufacturing firms.
In the service sector, optimism dipped as the data signalled a further reduction in staffing levels in small service providers, mentions of redundancies, l a y - o ff s and company restructuring, alongside reports that firms were not replacing voluntary leavers.
Andrew Harrison, head of business banking at RBS, said: “There are reports of stretched supply chains, fierce competition and Brexit is starting to come through as a concern for small businesses.
“However, the business outlook seen by small firms for the next 12 months remains positive, albeit slightly muted, so there are still underlying signs of optimism.”