Aldermore Bank’s quarterly SME Monitor compiled by the Centre for Economics and Business Research (CEBR) showed that SME salaries were up year on year in Q4 by 1.2 per cent, while labour costs accounted for around 30 per cent of total business expenses.
The wage growth pushed the rate of cost inflation to 0.9 per cent, higher than the previous 0.7 per cent, but lower than the one see in 2012.
The largest cost increase was seen in the construction sector, while manufacturing businesses only saw a 0.2 per cent increase year on year due to a fall in input cost inflation on basic products.
CEBR senior economist, Rob Harbron, said: “With GDP projected to rise by 3.3 per cent compared to 2013, it is welcome news that growth is seen to be coming from all three major industrial sectors.
One particularly encouraging trend that may emerge over the medium term is that of reshoring: with 1,500 manufacturing jobs identified as having been returned to the UK since 2011, a rise would be a valuable support to a sustained recovery.”
Continuing the positive trend, the number of business failures also continued to decline with 3,800 SME insolvencies in Q4 2013, down from 4,100 during the same period in 2012.