LAUNCHPAD: All-systems go for small businesses

Small business activity is at a record high, with manufacturers booming.

by Rachel Savage
Last Updated: 25 Feb 2014

Small businesses are finally getting in on economic growth, with an index of small business activity at its highest level since it started in 2007. It’s not just big retailers who’ll be feeling more confident then.

Bibby Financial Services’ Business Factors Index hit 111.4 in the last quarter of 2013 (100 is its 2007 level), up from 105.1 the previous quarter and 100.3 in 2012.

Manufacturing was up 9.1 points during the quarter to 137, way above a low of 84 in the middle of 2009. Transport and haulage drove up 13.1 points to 116.6.

However, construction stayed put at 115.9, probably at least partly reflecting the invoicing company’s stronger presence in the north of England, where the housing market hasn’t frothed up quite as much as London and the south east. Services was still below its 2007 level at 95.1, although this was up from 91.1 the in previous quarter.

The index is a pretty narrow snapshot, as it tracks the turnover of Bibby’s 4,000 or so customers (via the invoices they issue) in just five sectors: manufacturing, construction, transport, wholesale and services. However, it’s still good news for the economy, which is growing both on the broader measures of GDP and nationwide business indices and at this micro-level.

Ministers have been pleading, coercing and pushing banks to lend more to small firms, so if the debt taps do turn on then small business growth could go through the roof. If that filters down to real wages, then we really could have a party on our hands…

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