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Following the announcement from the CBI that small manufacturing businesses are experiencing a three-year low in terms of output, the latest Business Factors Index by Bibby Financial Services shows that the trading performance of UK manufacturers is currently at pre-recession levels. The index has been charting the performance of Bibby’s UK clients since the start of the economic downturn in 2007, across five key sectors from a base point of 100. The latest data, based on business turnover, reveals that the manufacturing sector has seen its highest levels of output for five years, as the quarterly average jumped to 122.8 from 114.2 in Q1, suggesting increased levels of confidence among firms and their customers. Alongside the index, Bibby has also surveyed the outlook and attitude of 450 UK SME owners. More than half of the manufacturing firms surveyed (52%) said they have seen orders on the rise, 55% have seen lapsed customers returning, and 58% have seen an increase in the number of enquiries they have received. The findings echo official statistics from the National Institute of Economic and Social Research, which reported a rise in manufacturing activity in May. However, the report also found that despite the heightened output, almost a third of companies believe the UK economy will not recover for another five years; and, as a result, 63% of businesses are planning to cut costs and overheads to ensure their growth continues. Edward Winterton, executive director at Bibby Financial Services, said: “By comparing what we are seeing among our own clients with the performance and outlook of SME owners more widely, it would appear that the businesses in the manufacturing sector enjoying better results during this difficult time are those with a secure cashflow in place. “Smooth cashflow will always be key to the success of a business and firms across the board need to be aware of the funding options available to help them achieve this. “Although the sector is showing heightened output, manufacturing firms are ensuring their growth will continue by looking at their current funding options.” Other Business Money News
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