MORE THAN half of small businesses do not feel ready to raise staff wages despite the upturn in the economy, according to the latest Viking Small Business Barometer.
The quarterly study reported that 52% of small business and medium business owners, including those in hospitality, believed the economy had not recovered enough to warrant staff pay rises.
This new figure was released in the same week that the British Chambers of Commerce (BCC) announced its estimated economic growth for the second quarter, starting in April, will be 2.8% - up on the previous estimation of 2.7%.
John Longworth, BBV director general stated “Our economic recovery is gaining momentum. Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition.”
In a separate report the BDO also stated that the economy was set to grow and wages were likely to increase during 2014.
"We expect UK economic output to surpass the level last reached before the onset of the financial crisis by July this year… What's more, the recovery has well and truly taken hold across all sectors, with manufacturing in particular driving strong job creation” said Peter Hemington, Partner, BDO LLP.
Many of the Viking survey’s findings support Longworth and Hemington’s comments about increase in industry with 41% saying their business had improved in the last three months and 76% anticipated more growth in the coming year.
However, two thirds felt that reports in the news of an improved economy did not reflect their current situation and could be the reason why only 48% of small businesses had raised their staff wages in correlation with the economic recovery.
Sophie Christopher, spokesperson for Viking, commented saying, “Although we’re seeing signs of economic recovery, SME owners still remain level headed with their approach, opting to tread cautiously rather than be too eager.
“While they’re reluctant to issue pay rises, small business owners recognise that living costs are rising and welcome an increase in minimum wage.”
The Viking Small Business Barometer asks 1,000 small business owners and managing directors across 15 sectors, including hospitality, to take part in a survey every quarter, to understand the thoughts of small businesses in the UK.