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Small business domestic turnover increased by 3% between Q1 and Q2 this year, a study by ABN AMRO Commercial Finance has found. The Cashflow Barometer is a quarterly indicator of the financial performance of small businesses in the UK, and is based on an analysis of 700 companies. The increase was led by the services and recruitment sectors, which saw turnover grow between Q1 and Q2 as well as year-on-year. Turnover in the manufacturing, engineering and distribution sectors decreased during these periods. Peter Ewen, managing director at ABN AMRO, said: “This latest barometer reflects the wider UK economic picture as the services sector continues to perform well, while industries producing physical goods lag behind. “George Osborne’s determination to increase manufacturing and construction through his Funding for Lending scheme, coupled with the latest UK GDP figures, highlight the importance of boosting the UK’s production industries.” The services sector experienced a rise in turnover of 8% between Q1 and Q2, and 5% year-on-year. Meanwhile, recruitment companies increased turnover by 15% between Q1 and Q2, and 9% against the same period in 2011. In contrast, turnover fell in the product-based sectors: manufacturing, engineering and distribution. The largest drop was in manufacturing, which experienced a decrease in turnover of 10% between Q1 and Q2 this year. The engineering sector saw a drop in turnover of 4% between Q1 and Q2, and 3% year-on-year. Distribution saw a similar fall of 3% and 5%. Peter added: “It’s encouraging to see such strength in the services and recruitment sectors, but the product-based sectors have struggled through another quarter. The march of the makers is clearly taking some time to materialise. “The recruitment industry has also been buoyed significantly by increasing demand for temp workers, so it remains to be seen whether it can maintain this performance long-term.” Other Business Money News
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