Business turnover across five key sectors peaked during the third quarter of 2011 for the first time since the start of the credit crunch, according to the latest study tracking the performance of 3,500 businesses by Bibby Financial Services.
The Business Factors Index, which follows Bibby Financial Services’ clients across manufacturing, construction, business services, wholesale and transport, rose to its highest quarterly average since it began in 2007, indicating a significant surge in performance in the third quarter.
The quarterly figure of 105.3 was substantially higher than the previous peak of 101.1 at the end of 2007, and only the third time since its inception that the Index has risen above the 100 mark that represents the level of activity in July 2007. It is also significantly higher than the figure for Q2 which was 96.7 and Q1 at 96.8.
The turnover increase highlighted in the Business Factors Index echoes the latest GDP figures released on 1st November, which show the economy grew by 0.5% over the same period.
Construction saw a quarterly rise from 98.1 to 116.8, while manufacturing also saw a significant quarterly increase from 116.6 to 122.0.
Bibby claims that the report indicates that companies not only shrugged off the impact of the collapse in both confidence and asset prices in the financial markets in the wake of the renewed eurozone crisis, but may even have benefitted as productivity levels have evidently increased. The large majority of firms are also now taking action to insure against any future downturn according to the latest Index, by cutting costs, improving supply chain management, implementing a growth strategy or even increasing prices.
However, confidence among business owners is still waning and they feel the economy is not yet through the worst.
An additional survey of 450 small and medium-sized businesses which runs alongside the Business Factors Index shows that the number of companies describing current conditions as ‘very tough’ has risen since June. Nine out of 10 firms said they believed that the economic recovery would not be fully secure for at least another year and possibly three.
Edward Rimmer, UK chief executive of Bibby Financial Services, said: “The results from Q3 are a welcome shot in the arm for small and-medium-sized businesses as the first two quarters of this year had returned disappointing performance across the sectors.
