Figures released today have confirmed that the UK’s small and medium-sized businesses are continuing to perform well.
The ‘SME Index’, compiled by accountancy firm PKF, measures the performance of small and medium-sized businesses in the construction, manufacturing and service sectors.
According to the index - whereby a score above 50 denotes an increase on the previous month - small and medium-sized business output across these sectors rose from 55.8 in the last quarter of 2006 to 56.0 this quarter.
Of the three sectors surveyed, manufacturers had the most marked increase in output for three years at 56.0, however the construction and service sectors also fared well.
The reasons offered by respondents for continuing growth included increased customer demand and new orders, seasonality and more effective marketing, PKF revealed.
In the construction sector improving weather conditions were beginning to be cited as an important factor while in the service sector the end of the tax year was said to be significant.
However, the index also found that output charge inflation was the highest reported since quarter four 2004 as small businesses attempted to counter higher input costs, PKF claimed.
Commenting on this quarter’s figures, PKF partner for growing business, Stuart Barnsdall, said: “Small and medium-sized businesses across the UK continue to perform robustly, but ever-increasing costs of raw materials are forcing businesses to put up their prices.
“There have already been a number of recent interest rate rises and with inflationary pressure still building, the Bank of England will almost certainly raise them again and therefore such robust growth is likely to be restrained in the coming months.”
© Crimson Business Ltd. 2007
