Services sector weathers economy

• UK small business turnover shows slight increase against Q1 • Service and retail sectors lead growth • Manufacturers continue to struggle
By: ABN AMRO Commercial Finance
 
Aug. 8, 2012 - PRLog -- Small business domestic turnover increased by 3 per cent between Q1 and Q2 2012 according to The Cashflow Barometer, a quarterly study by Invoice and Asset Based Lender, ABN AMRO Commercial Finance.

This increase was led by the services and recruitment sectors, which saw turnover grow between Q1 and Q2 2012 as well as year on year (YoY). Conversely, turnover in the manufacturing, engineering and distribution sectors decreased over these periods.

The data echoes recent UK GDP figures from the ONS, which showed that the UK economy has continued to shrink for a third consecutive quarter – weighed down significantly by the construction sector which fell by 5.2 per cent in Q2.  

Peter Ewen, Managing Director at ABN AMRO Commercial Finance comments, “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 Cashflow Barometer is a quarterly indicator of the financial performance
of UK small businesses, based on analysis of 700 companies.

Services lead the way

The services sector experienced a rise in turnover of 8 per cent between Q1 and Q2 2012, and 5 per cent YoY.

Meanwhile, recruitment companies increased turnover by 15 per cent between Q1 and Q2 2012 and 9 per cent against the same period in 2011.

In contrast, turnover fell in the product-based sectors (manufacturing, engineering and distribution) between Q1 and Q2 2012 and YoY. The largest drop was in manufacturing, which experienced a decrease in turnover of 10 per cent between Q1 and Q2 this year.

The engineering sector saw a drop in turnover of 4 per cent between Q1 and Q2 and 3 per cent YoY. Distribution saw a similar fall of 3 per cent between Q1 and Q2 and 5 per cent YoY.

Peter Ewen comments, “It’s encouraging to see such strength in services and recruitment sectors, but manufacturing, engineering and distribution have all 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.”





Ends

Notes to editors

About The Cashflow Barometer Report

Please find an infographic, further illustrating the data here: http://www.manbitesdog.com/wp-content/uploads/2012/08/Cas...

The Cashflow Barometer is comprised of statistics from almost 700 ABN AMRO Commercial Finance customers. All companies in the sample fall into the BIS definition for small businesses – under £5.6m turnover and fewer than 50 staff. Percentage changes are based on mean averages for monthly turnover, customers, time taken to pay invoices and invoice numbers for the years 2007-11. The percentages included are percentage changes between two values.

About ABN AMRO Commercial Finance PLC (formerly Venture Finance PLC.)

ABN AMRO Commercial Finance is an award-winning Invoice and Asset Based Lender and part of the ABN AMRO Commercial Finance Group. Established in 1989, the company provides Factoring, Invoice Discounting, Export Finance, Structured Finance, Asset Based Lending and numerous related services to start-ups through to £250m turnover organisations. Providing consistent support via its 200+ staff and 11 regional offices, ABN AMRO Commercial Finance helps clients manage working capital, refinance, restructure, fund business opportunities and expansion, purchase new equipment and finance M&As.

Visit: http://www.abnamrocommercialfinance.co.uk for more information.
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Source:ABN AMRO Commercial Finance
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