Private companies are eyeing expansion plans and growth this year as a recent survey revealed most companies hold positive outlooks for the economy. The survey showed that the number of companies planning for development and growth has dramatically increased in mid-term.

Accounting firm KPMG recently released its annual private business survey of companies.

The audit firm stated that while companies are setting out growth plans, tight lending conditions and staff shortages can risk expansion plans.

Among the surveyed businesses, 70 per cent of these businesses said they believed the economy was recovering and were positive about their mid-term economic outlook. The figures were up from just two per cent at the same period last year.

More than half or 75 per cent of the businesses includes growth is their high priority as they prepare to expand their operations. In the previous year, 30 per cent have planned to downsize.

Half of the surveyed companies said they increased the staff size in the last six months while two thirds intend to recruit in the next 12 months.

Marco Di Sebastiano, head of private enterprise for KPMG, said that the shortage of talented staff was presenting a barrier to business growth.

"Two thirds of the respondents claimed they suffered hiring constraints over the past 12 months, citing talent shortage as the main contributing factor," said Mr. Di Sebastiano.

He said that another challenging note from the respondents was securing credit with banks more selective about what sectors and customers they support since the global financial crisis while the eurozone's debt crisis has heightened the situation.

"The survey indicates that only a quarter or 25 per cent of this sector is looking for bank funding highlighting their self-sufficiency in difficult times," he said.

"The survey found, however, that maintaining and developing banking relationships has been a preoccupation for many," said Mr. Di Sebastiano.