By Daniel Hunter
Manufacturing is outperforming all other sectors in business activity, including services, according to the latest Business Factors Index (BFI) from Bibby Financial Services, the UK’s largest independent invoice finance provider.
The BFI tracks the turnover of Bibby Financial Services’ 4,000 small to medium-sized enterprises (SME) clients across construction, manufacturing, wholesale, transport and storage and business services sectors.
The Q1 2013 Index shows manufacturing standing at 116.7 — up from 114.2 in the same period last year - following the strongest Q1 performance in manufacturing since the index began in 2008.
Figures released last month showed that the UK avoided a triple dip recession, with the economy growing by 0.3 per cent in the first quarter of the year. But the Office for National Statistics (ONS) results suggested the manufacturing sector in fact contracted by 0.3 per cent — an observation not aligned with the BFI results.
“Unlike other indicators which focus on all business activity, our Index offers a specific view of the business environment faced by SMEs we are working with on the ground," David Postings, CEO at Bibby Financial Services said.
“Quarter one was generally a period of uncertainty across the board, however, in key sectors such as construction and manufacturing, we have seen encouraging results over the past 12 months and stable performance in the first three months of the year.”
Adverse weather earlier in the quarter had little impact on the construction sector, which experienced strong year-on-year growth, standing up at 102.6 from 93.6 in Q1 2012 — an increase of 9.6 per cent in 12 months.
Despite being hailed as the driver behind this quarter’s wider economic growth, business services was the weakest performing sector among SMEs in the Index, dropping almost 20 points in 12 months from 100 in Q1 2012 to 80.2 in 2013.
“Businesses performing well today have battled through the recession and as a result are leaner, tougher and wiser than before. But many are still erring on the side of caution when it comes to investing for business growth," Mr Postings continued.
“It’s fair to say progress in the first three months of 2013 has been limited, but at least things are moving in the right direction. What is clear from our research is that there are growth opportunities in each sector.”
Key findings of the Q1 2013 BFI include:
- Contrasting recent ONS figures, SMEs are performing better in manufacturing and construction sectors than wholesale and service sectors.
- Manufacturing is the strongest performing sector of the first quarter, standing at 116.2.
- The construction sector has continued to grow year-on-year since a low of 76 in 2009, now standing at 102.6.
- The transport and storage sector has seen a Q1 index high of 100.8, despite being down from 103.1 from the final three months of 2012.
- The business services sector remains the weakest performing sector at 80.2, down from 88.2 in Q4 2012.
Wholesale activity continues to fluctuate finishing down at 101.5 in Q1, from 112.2 in Q4 2012.