Q3 Business Factors Index Highlights Growth for Firms with Funding in place
Manufacturing and construction sectors bucking industry trend
Small and medium-sized enterprises that have the support of business funding facilities, are outperforming the rest of the UK in terms of growth and turnover, according to the latest data from Bibby Financial Services for the third quarter of 2012.
The Business Factors Index, which tracks the turnover and performance of Bibby Financial Services’ 4,000 UK clients, has revealed a four per cent increase in activity over the first three quarters of this year compared to Q1 to Q3 of 2011.
The index also reveals that Bibby Financial Services’ clients in the construction and manufacturing sectors experienced increasing turnover levels over the past three consecutive quarters, bucking the trend in their sectors in terms of growth.
According to the Office for National Statistics construction output fell by 0.9 per cent in August, and manufacturing output dropped by 1.1 per cent in the same period. However Bibby Financial Services’ index, which tracks the level of performance against a base rate of 100, found manufacturing clients in Q3 were up on Q2 by 5.5 per cent, and construction clients in Q3 were 0.9 per cent up on Q2.
The invoice finance specialist said the increase in activity among its client base, compared to ONS data, provides clear evidence that businesses with a flexible funding facility in place are in the process of recovering from the recession and heading towards a sustained period of growth.
General business outlook for Q3 2012
In addition Bibby Financial Services surveyed decision makers at 450 SME businesses in the UK, outside of its client base, to gauge the outlook of the wider community.
The results of the SME survey, carried out by BDRC Continental, suggest businesses in general are still finding conditions tough with any talk of recovery still a distant aspiration.
In contrast to the Bibby Financial Services client base, many SMEs are seeing a drop in new orders and customers.
The key findings from the survey include:
- 30 per cent of manufacturing firms said they have seen an increase in new customers over Q3. This is down from 41 per cent in Q2
- Almost a quarter of manufacturing firms, 24 per cent, said they had seen an increase in orders over Q3. This is down from 52 per cent in Q2
- Almost a third, 28 per cent of firms in the construction sector said they had seen no sign of recovery during Q3
- 28 per cent of SMEs across all sectors say their business is doing worse than a year ago
Edward Winterton, commercial director at Bibby Financial Services, says: “We have been tracking the performance of our 4,000 clients since 2007 and it is clear that those firms with funding support in place have been able to move out of recession and grow their business.
“Not only have we seen an overall increase in activity for the first three quarters of this year compared to 2011, but our clients in key sectors such as construction and manufacturing are experiencing real growth where official figures from the Office for National Statistics are suggesting a drop in output.
“Alongside our own clients’ data, the survey we carry out among 450 small and medium-sized businesses, underlines how firms in the wider business community are not performing at the level necessary to achieve economic recovery.
“In key sectors we are seeing a drop in terms of new orders and customers, with more than a third, 35 per cent, of all those surveyed saying they have not seen any signs of recovery during Q3, which is up from 20 per cent at the start of the year during Q1.
“In simple terms, many more businesses need the kind of funding support that is helping our client base to grow and recover from recession, and the Government has a role to play in ensuring all business owners are aware of the breadth of options.
“We no longer live in a world where businesses are able to rely on one single stream of funding from their bank and more flexible alternatives must be considered to help SMEs to move into growth during a critical time for the economy.”
The Business Factors Index sector breakdown:
|INDEX SECTOR BREAKDOWN|
|Manufacturing: Q3 129.6||Construction: Q3 100.5|
|Up 5.5% on Q2||Up 0.9% on Q2|
|Up 13.4% on Q1||Up 7.3% on Q1|
|Wholesale: Q3 108.6||Transport: Q3 99.0|
|Down 9.1% on Q2||Down 8% on Q2|
|Up 1.3% on Q1||Up 1.6% on Q1|
|Business Services: Q3 94.0|
|Down 6% on Q2|
|Down 6% on Q1|
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About Bibby Financial Services
Bibby Financial Services is the UK’s leading invoice finance specialist, currently providing cash flow funding for nearly 4000 businesses, handling annual client turnover of £3.9 billion and advancing in the region of £342 million.
With a network of 16 local offices throughout the UK, Bibby Financial Services has the capability, flexibility and independence to make informed funding decisions quickly and efficiently.
Bibby Financial Services supports businesses in both the UK and overseas, utilising expert knowledge from more than 27 years’ experience, helping companies regardless of size or industry sector.
Bibby Financial Services recently secured a £430 million refinancing facility ensuring its ability to meet increasing demands for its finance facilities.
In 2011 and 2012, the company was awarded a place in The Sunday Times 100 Best Companies to Work For, based on workplace performance and best practice.
About Bibby Line Group
Bibby Financial Services is supported by its parent the Bibby Line Group, a business-to-business services group involved in ship owning and operation, shallow water accommodation, offshore oil and gas services, contract logistics, financial services, memorial parks, employment law and health and safety advisory services, specialist plant and equipment hire, and retail.
The company was founded by Liverpool entrepreneur John Bibby in 1807 and has its head office in Duke Street, Liverpool.