UK Small Business Output Rockets
Figures from Bibby Financial Services have found that small firms in the UK are enjoying a spike in output.
Small businesses make up more than 95 per cent of the UK’s firms, so it is clear that they play an important role in economic recovery. Fortunately, new research has found that output is rising among small and medium-sized companies.
The latest Business Factors Index from Bibby Financial Services (BFS) stands at 101 for the first quarter of this year – a score that is higher than any Q1 since 2008 and suggests that the UK is finally beginning to return to pre-recession levels of activity in at least some sectors.
“We have seen already that the Bank of England’s Monetary Policy Committee has upgraded its forecast for growth in the UK during the first quarter, and we would expect the official estimate of GDP on April 29th to reflect the positivity the Index has highlighted,” says BFS chief executive David Postings.
BFS tracks the turnover data generated by its small business clients to collate the Index, which focuses on key sectors such as manufacturing, transport, construction, wholesale and business services. Though this does mean the data doesn’t necessarily reflect the bigger picture of the economy as a whole, those industries provide a good insight into a cross-section of the UK.
Manufacturing performed particularly strongly. It saw its highest level of activity for a first quarter, but more dramatically, it was also the second-best performance in any quarter of the year since the index began during the economic crisis.
On the other hand, construction did not fare as well, with the lowest activity levels in five years since Q1 2009. Even so, activity increased towards the end of March, which BFS says ties in with the chancellor’s Budget announcement that Help to Buy will continue to the end of this decade.
Interestingly, the report also shows that many firms are looking towards alternative sources of finance to help them manage their operations and invest in growth. As many businesses continue struggling to find support from the banks, Mr Postings says that growing numbers of companies are using invoice finance.
“The Business Factors Index figures are a sign of the vital role non-bank lenders play in enabling firms to grow with sustainable cashflow,” he explained.