Doom and gloom about the current economic climate is everywhere, but there is some good news and small signs of recovery. According to a survey by Bibby Financial Services, an invoice finance provider to SMEs, the manufacturing sector is starting to perform once more. This not only shows that the economy is perhaps starting to get back on track, but also shows the importance of invoice factoring in that recovery; all the companies interviewed were invoice finance customers.
The Business Factors Index produced by BFS shows that of 4,000 clients, manufacturing businesses are performing the best and have improved turnover significantly on recent years. This sector is at its highest level of output since the start of the economic downturn in 2007. This is based on business turnover, one of the key indicators of growth and one of the areas that invoice finance can help to improve. The quarterly average output jumped from 114.2 to 122.8 in Q1, showing there was not only an increase in confidence amongst businesses but also within their customer bases.
However, though this is all good news, the index also revealed that the manufacturing sector is actually a bit of a mixed picture. Despite increased output, many businesses are still being conservative about growth and expansion, with most appearing to be digging themselves in for the recession long haul. Almost a third of them believe the UK economy will not recover adequately for at least another five years – as a result, 63% are planning to cut costs and overheads to maximise their chance of survival.
This all shows that even if output is increasing, the bigger economic picture is still having impacts on business confidence. Invoice finance can help to remedy this to an extent, helping firms access better cash flow to enable them to maintain growth – all without taking on huge debts and interest repayments.