Business turnover at five year high in Q1

A report looking at the turnover of 4,000 UK businesses suggests that the first quarter of 2012 was the best performing quarter year-on-year since the start of the economic downturn in 2007.

In addition, more businesses reported an increase in new customers and confidence, suggesting a more positive year ahead for small and medium-sized businesses.

The Business Factors Index from Bibby Financial Services has been charting the performance of its clients from a base point of 100, across key industry sectors including manufacturing, construction and business services, for the past five years.

Traditionally, seasonal factors mean the average performance for the first quarter of the year is low. But in 2012 it reached 100.3 which is the highest level for Q1 since 2008 when it was 90.4. This suggests there could be increased growth throughout the year if there is similar increased activity in the remaining quarters.

In addition the Index analysed the outlook among 500 SME business owners; this also depicts a more positive Q1 as almost half of businesses saw a significant rise in the number of new and former customers returning.

The encouraging activity during Q1 is coupled with a rise in the number of businesses applying for funding with almost one in five (17 percent) extending their external finance facilities.