Bibby Financial Services recently released its Business Factors Index for Q1, 2014. The Business Factors Index is a quarterly report measuring business activity – based on the value of invoices issued by Bibby Financial Services for 4,000 small and medium sized enterprises in the UK since 2007. The report focuses on supporting sustainable recovery for the UK economy.
The Index looks at five key sectors: manufacturing, construction, business services, wholesale and transport, the unique insight provided by the report finds a positive opening three months of 2014 for UK businesses. With activity reported at its highest for any Q1 period since 2008. The positive performance was mirrored by April’s Q1 GDP estimates from the Office of National Statistics, which were 0.8%. This marks the fifth consecutive period of growth.
A broad based recovery
Other key points from Q1 include the revelation that average wages growth (1.7%) had outstripped inflation (1.6%) – the first time for six years, barring two months in 2010. This breakthrough could be key in making the recovery feel ‘real’ to the man on the street.
Strong levels of activity for Business Services
Strong recovery signs have been recorded in the SME Business Services sector, which could be well positioned to profit from an upturn in demand from other businesses using their services.
Many of these companies are in the recruitment industry, and with the employment market showing steady recovery it’s anticipated that business levels will continue to rise.
Manufacturing on the rise
The sector that put in a star making performance and recorded the second highest level for any quarter since the Index began was Manufacturing, which is by all accounts riding a wave at the moment.
The buoyancy reflected in the Index as respondents in the manufacturing sector were the most upbeat about the future for their sector as a whole, with 59% predicting some or significant growth in the next three months.
On the road back to health
Transport companies indicated an overall optimistic tone about the road ahead over the next three months. This resilience was despite fuel price rises which have a direct impact on the sector.
The Wholesale sector is also showing quiet optimism and a possible knock on effect from positivity in other sectors. Barring any unexpected slowdown the future for this sector looks positive too.
The only sector showing real cause for concern is Construction. Activity fell dramatically in this sector and a reading of 79.7 for Q1 2014 compares poorly to the 102.6 recorded in Q1 2013, and is a sharp fall from the score of 115.5 in Q4 2013.
Very wet weather and floods recorded during the early part of the year could have had a real impact on the sector, and figures taken from March are more positive. However, we need to see the next 3 months results before we can pinpoint an overall trend.
Download the report now
The Bibby Financial Services’ Business Factors Index for Q1, 2014 features a wealth of insight into the recovery. It makes fascinating reading on current economic factors and how they impact UK business.
Bibby Financial Services is the UK’s leading independent invoice finance specialist and a trusted provider of cashflow funding solutions to 7,000 businesses, handling annual client turnover of £4.9 billion and advancing in the region of £388 million. . If you’re in business and looking for alternative sources of funding, you can contact Bibby Financial Services here. We’ll be happy to help in any way we can.