Small service sector companies hit hardest by recession
Feb 17 2011
Small companies in the service sector were more vulnerable during the recession
Small businesses in the service sector were hit hardest during the recession, as they suffered a peak-to-trough drop in turnover of 38 per cent.
Medium-sized companies, with 50 to 249 employees, saw turnover decline 19 per cent from its highest point to its lowest point during the economic downturn.
Large service sector businesses only recorded a 3 per cent peak-to-trough drop in turnover, according to data from the Office of National Statistics (ONS).
However, in the manufacturing sector, there was less variation in performance between the different sizes of company.
Large manufacturers suffered a 14 per cent decline in turnover peak-to-trough, compared to a 10 per cent drop reported by both small and medium-sized manufacturers.
ONS statistician Tullio Buccellato suggests that smaller companies providing specialist services are particularly vulnerable to a fall in discretionary demand.
‘By contrast, manufacturing smaller firms operating in niche markets may have been able to absorb the crisis better than larger, more globally orientated producers such as car makers,’ he explains.
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