Recovery signs for small businesses
Sep 21 2011
There are promising signs of increased fortunes for SMEs
Small businesses may be enjoying a recovery despite broader economic uncertainty, research finds.
According to a new quarterly report from invoice financier Venture Finance, turnover for small businesses increased by 16.2 per cent between the end of 2009 and the second quarter of 2011, signalling a return to growth for the small business sector.
The recovery comes after a deep decline in turnover during the recession of 10.5 per cent between 2007 and the end of 2009.
Venture Finance managing director Peter Ewen says, ‘This is just what the economy needs. While tentative in some respects, small businesses have worked very hard since 2009 and have enjoyed increasing success as a result.’
The average number of customers per business has almost returned to pre-recession levels. Despite having fallen by 6.6 per cent from 2007 to a 2009 low, they have rallied by 5.8 per cent to Q2 of 2011, to 25.6 customers on average. The time taken to pay invoices has also fallen, an encouraging sign for recovering businesses.
Sectors vital to the economy have also experienced a significant recovery, with the manufacturing and engineering sectors enjoying turnover growth of 32 per cent and 19.1 per cent respectively between 2009 and Q2 of 2011.
Export growth has also been promising, with small business export turnover returning almost to pre-recession levels after a severe 33.5 per cent fall to the end of 2010. A rapid recovery saw a 46 per cent rise between 2010 and Q2 of 2011 and export turnover is now down by just 2.2 per cent on the 2008 high.
Average days outstanding for payment from export customers have also improved from a high of almost 72 in 2007 to just over 64 in quarter two of 20111, a fall of 10.2 per cent. Export customer numbers have enjoyed a similar boost since their height in 2008, rising from a low of 4.6 by 30 per cent to an average of six.
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