Growth in construction points to sector recovery
Published: 14 November, 2012
UK: Construction firms in the UK supported by Bibby Financial Services have seen three consecutive quarters of growth, according to an economic study produced by the invoice finance specialist.
The Business Factors Index has been tracking the turnover performance each quarter of Bibby Financial Services’ 4000-strong client base against a base point of 100 since 2007.
In Q3, the productivity of Bibby Financial Services’ construction sector clients increased by 0.%, compared to the 2.5% decrease seen across the industry as a whole for the same period according to the Office for National Statistics. The latest Asset Based Finance Association (ABFA) statistics also showed that one in four construction businesses using asset-based finance have a Bibby Financial Services funding facility in place.
Graham Plater, construction sales director at Bibby Financial Services says the latest results from both its own Index and ABFA clearly demonstrates how construction firms with effective funding support in place are beginning to see a more positive future.
Running alongside the Business Factors Index, Bibby Financial Services also surveyed a sample of 450 businesses about their performance and prospects for future growth.
This survey also pointed to a more encouraging period to come for the construction sector with the key findings including:
- 40% of construction firms are feeling positive about the future compared to 33% year-on-year
- 14% said they are having to make cuts and only just surviving, a drop of 21% year-on-year
- 24% say their business is doing better than a year ago, compared to 10% in Q2 and 16% year-on-year
- 43% are seeing lapsed customers returning compared to 30% in Q2 and 36% year-on-year
- 24% are seeing an increase in new orders, compared to 9% in Q2 and 16% year-on-year
Mr Plater said: “The role of business funding in aiding the progress that our clients have achieved over the last three quarters cannot be understated. Although there has been encouraging signs in the survey of 450 SME owners, nearly 50% f construction firms still say they have not applied for external finance.
“If it is the case that the economy is beginning to come out of recession, it is now that construction firms need the financial support necessary to create a stable platform upon which to grow. Businesses can be just as vulnerable coming out of recession as going into it in the first place.
“Funding options including alternative facilities such as construction finance, which will adapt to the business as it grows, without the burden of taking on more debt.”