The number of private companies planning for growth has risen dramatically as the majority hold positive outlooks for the economy, research shows.
However tight lending conditions and staff shortages pose a risk to expansion plans, according to accounting firm KPMG’s annual private business survey.
Seventy per cent of businesses surveyed said they believed the economy was recovering and were positive about their mid-term economic outlook, up from just two per cent at the same time last year.
Growth is high on their agenda, with 75 per cent of businesses preparing to expand their operations, compared to 30 per cent last year that said they planned to downsize.
Half of the businesses surveyed said they increased staff numbers in the last six months, and two thirds intend to recruit in the next 12 months.
KPMG’s head of private enterprise Marco Di Sebastiano said a shortage of talented staff was presenting a barrier to growth.
“Two thirds of survey respondents claim to have suffered hiring constraints over the past 12 months, citing talent shortage as the main contributing factor,” he said.
Securing credit is also an issue, with banks more selective about what sectors and customers they support since the global financial crisis, Mr Di Sebastiano said.
That caution has only heightened since the onset of the eurozone’s debt problems.
“The survey indicates that only 25 per cent of this sector is looking for bank funding, highlighting their self-sufficiency in difficult times,” he said.
“However, the survey found maintaining and developing banking relationships has been a preoccupation for many.”