A quarterly index of 4,000 small and medium-sized enterprises in the UK has shown that the fourth quarter of 2013 saw the highest level of business activity since it began tracking in 2007.
The Business Factors Index, produced by business funder Bibby Financial Services, tracks the monthly turnover of businesses across five industry sectors – manufacturing, construction, transport, wholesale and business services. Its base point of 100 was established when the Index began in 2007.
Echoing the official GDP figures announced by the Office for National Statistics on January 28, the Business Factors Index indicates record levels of growth across the board and particularly strong performances in manufacturing (up 9.1 points quarter-on-quarter) – helped by a strengthening domestic market – transport and haulage (up 13 points), and more modest growth in business services (up 4.1 points).
However, activity in construction remained at the same level as Q3 2013, which is possibly a sign of the sector levelling out following 12 months of high growth, coupled with some uncertainty in the market regarding the longevity of Government-backed schemes such as Help to Buy.
Overall, the Index for Q4 2013 across all sectors stands at 111.4, up 11.1 points on Q4 2012. The Index for 2013 as a whole saw an increase of 1.2% in turnover activity across the SMEs base – again echoing national economic growth for the same period of 1.9%.
The finance provider says the record levels of business activity seen during Q4 will serve to underpin hopes of a sustained recovery taking hold in 2014, following four consecutive quarters of GDP growth.
Bibby Financial Services says its latest Index also underpins the vital role played by SME businesses in driving the recovery as many of its clients represent the ambition of UK businesses to bounce back from the recession to generate growth.
David Postings, UK CEO at Bibby Financial Services, said: “While the figures we’ve seen from the ONS suggest positive levels of GDP growth, it is important to remember that it is a very broad measure.
“The Business Factors Index is a very specific examination of turnover levels, in terms of invoices being issued, by 4,000 SME firms in the UK. As such we feel it provides an interesting snapshot of business performance across five industry sectors.
“The Index figures for Q4 2013 are undeniably encouraging and represent the highest level of activity since we started in 2007, which is very much in line with the wider measure of GDP.
“Our clients encompass a wide range of small and medium-sized businesses, from independent British manufacturers, hauliers and security firms, through to roofers, plumbers and plasterers. Many have come through huge challenges in terms of the economic downturn from 2008 onwards and it is therefore positive to see that many are in better shape and attracted more orders at the end of last year than at the end of 2012.
“It is these types of businesses that will be the key to a long and sustained economic recovery, and it’s important that they continue to receive the support and financial backing that they need to ensure a healthy 2014 and beyond.”
