Surge in manufacturing sector leads to highest SME turnover rate for five years

The invoice finance specialist has been tracking the turnover performance of its client base across five key sectors since the second quarter of 2007. The latest data shows a surge during Q2 led by strong performances in the manufacturing and construction sector, followed by transport, wholesale and business services.

The findings echo official statistics from the National Institute of Economic and Social Research, which also reported a rise in manufacturing activity in May. The surge is thought, in some part, to have been down to the traditional May bank holiday moving to June for the Queen’s Jubilee.

In addition, owners of 450 SMEs who took part in a survey of business outlook which runs alongside the Bibby Financial Services turnover data, have seen increases in performance. Encouraging levels of new orders, new inquiries and general confidence about trading conditions suggests growing positivity in some areas.

However, the report also highlighted that fewer businesses compared to Q1are planning to trade overseas with just 11 per cent stating it was a business objective.

Crucially, more than two thirds (69 per cent) of businesses say they have not applied for any external funding during this quarter, up from 55 per cent previously.

David Postings, UK CEO for Bibby Financial Services, said that the level of turnover seen by clients in the past quarter, and more widely since the recession, is testament to the role funding can play in driving up business performance.

He says: “The business turnover data we have from the second quarter from our own client base demonstrates the importance of funding options to business in the UK.

“In addition the latest figures from the Asset Based Finance Association highlights how turnover from companies using asset based funding has grown six per cent, compared to last year.

“The Government and the Bank of England announced that more funds will be available to businesses through the Funding for Lending Scheme, but once again it will be the banks that act as the conduit for those funds.

“Given the strength of the asset-based lending sector and spotlight on alternative finance by the Government itself, this could have been an opportunity to deliver funding through a wider range of channels.

“The danger is we will continue to see promising businesses fail because they have not had the necessary support or, of most concern, because they are not aware of all the options.”

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