By Daniel Hunter
Small to medium-sized enterprises (SMEs) in the construction sector have experienced their highest performing Q1 since 2008, according to the latest Business Factors Index (BFI) from Bibby Financial Services, the UK’s largest independent invoice provider.
The BFI tracks the turnover of Bibby Financial Services’ 4,000 SME clients across construction, manufacturing, wholesale, transport and business services sectors. Performance is expressed as a numerical figure, based on a base mark of 100 for all clients when the Index began in 2008.
The funding provider’s construction clients have seen a period of significant growth since Q1 2012, with the Index for the last quarter standing at 102.6, up nine points from 93.6 in Q1 2012.
This can be contrasted with construction output in the wider sector which according to figures from the Office of National Statistics (ONS) fell by 6.5% over the same period.
“The first quarter of 2013 has undoubtedly been tough for a lot of SMEs, but the BFI shows our construction clients performing well and investing in their businesses in the last twelve months — a far cry from Q1 2009 when activity dropped to only 76 points, and in stark contrast to the performance of the wider construction industry," Graham Plater, sales director for construction at Bibby Financial Services said.
“Our construction finance team has been hearing positive news from clients who have weathered the economic storm of the past five years and are now looking to invest for the future by using alternative funding solutions.”
ONS data released this month suggested that construction output fell by 2.4 per cent in the first three months of the year. However, the latest Markit/CIPS Construction Purchasing Managers’ Index (PMI) shows the sector improving with steady growth from March to April.
Vince McCormick of V&C, a construction company based in Swansea said: “We have seen significant growth over the past year reaching a turnover of £2.2million, which exceeded our initial forecast, and this has enabled us to free up more funds as a result of our funding facility.”
Mr Plater added: “Businesses using funding solutions such as invoice finance, to grow their businesses through investment are helping to restore confidence in the construction sector and, subsequently, the wider economy.”
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