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Stuart Gentle Publisher at Onrec

SMEs in business services sector heading back towards pre-recession levels

The Business Factors Index of 4,000 small and medium-sized enterprises in the UK has revealed that Q4 2013 saw both quarterly and annual levels of growth within the business services sector, for the first time since 2007.

The Business Factors Index of 4,000 small and medium-sized enterprises in the UK has revealed that Q4 2013 saw both quarterly and annual levels of growth within the business services sector, for the first time since 2007.

The index, produced by specialist 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 with a particularly strong performance in business services, up 4.1 points quarter-on-quarter and seven points year-on-year.

David Postings, UK CEO at Bibby Financial Services, says: “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.

“During the first quarter of 2009, the sector slumped to 79.1 and stayed below 90 until 2012. The index for this last quarter shows growth both annually and quarterly, which the sector hasn’t seen since it began in 2007, so this can be regarded as a very positive sign.

“Many of our business services clients have come through huge challenges in terms of the economic downturn from 2008 onwards. We are not yet seeing a return to pre-recession levels, but the sector performance is improving, which is a real positive. It is also very encouraging to see that so many are in better shape and attracted more orders at the end of last year than at the end of 2012.”

The positive levels of business activity seen within the business services sector during Q4, combined with the strong performances in manufacturing, transport and wholesale, will serve to underpin hopes of a sustained recovery taking hold in 2014.

Postings adds: “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.”