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 shown a 4% 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 2.5% in Q3, and manufacturing output dropped by 1.1% in August. 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%, and construction clients in Q3 were 0.9% 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.
Bibby Financial Services also 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.
30% of manufacturing firms said they have seen an increase in new customers over Q3. This is down from 41% in Q2. 24%, said they had seen an increase in orders over Q3. This is down from 52% in Q2.
Meanwhile, 28% of firms in the construction sector said they had seen no sign of recovery during Q3 and 28% of SMEs across all sectors say their business is doing worse than a year ago.
Edward Winterton, commercial director at Bibby Financial Services, said: “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%, of all those surveyed saying they have not seen any signs of recovery during Q3, which is up from 20% 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.”
