By Daniel Hunter
Small and medium-sized businesses in the UK have matched wider industry performance throughout the third quarter of the year, according to a study of the output of thousands of businesses, with manufacturing and construction firms forging ahead.
The Business Factors Index report (BFI), compiled by the UK’s largest independent invoice finance provider Bibby Financial Services, is due for release later this month and will highlight increasing levels of activity and confidence among SMEs, boosted by the improving macro-industrial picture, with strong year-on-year performances in sectors such as wholesale and transport.
The findings form part of one of the biggest studies of its kind among SMEs, and follow news that the International Monetary Fund (IMF) has upgraded its growth projection for the UK to 1.4 per cent from July’s estimate of 0.9 per cent.
The index suggests manufacturing firms have seen a 5.1 point increase in performance from the second quarter, and for construction firms the figure is 5.7 points. In addition, while the overall index remained the same from Q2, year-on-year the level of output across the 4,000 businesses has risen 2.1 points from Q3 2012.
Bibby Financial Services UK CEO, David Postings said: “Quarter three was generally a period of good performance across the board with increasing optimism among SMEs.
“In key sectors such as manufacturing and construction, we have seen encouraging results over the past 12 months and growth in construction activity could be a result of stimulation from the Help to Buy scheme.”
Postings has, however, warned that while the report reflects increasing positivity there is still a lot to be done for UK SMEs. He said: “The latest Business Factors Index results are a welcome sign of encouragement for the economy. However, it will be interesting to see whether there has been further growth when Gross Domestic Product figures are released later this month.
“The IMF’s forecast upgrade is a positive announcement, but at the same time unemployment is still above seven per cent and there remain a significant number of businesses unable to access the finance they require to survive - let alone grow.”
The Business Factors Index compiles its results based on the turnover activity of Bibby Financial Services’ 4,000 UK clients, updated quarterly against a base point of 100 since 2007.
Postings added: “Unlike other indicators which focus on all business activity, our index offers a specific view of the business environment faced by SMEs on the ground. In addition to activity results the report will announce that confidence among SMEs is growing with over a third of SMEs (36 per cent) saying that business is better than six months ago."
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