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Turnover down for small businesses

Small businesses have experienced a 7% decrease in domestic turnover in the period from Q4 2011 to Q1 2012, according to the quarterly study, The Cashflow Barometer, published by ABN AMRO Commercial Finance.

Export turnover also fell during the same period by 9%. However, year-on-year turnover is still up 68%. This reflects the general situation in the economy, with the UK technically heading back into recession. However, it’s not all doom and gloom, according to ABN AMRO Commercial Finance International Manager, Peter Brinsley.

“Short-term paralysis fuelled by continuing speculation of a double dip recession should now be at an end and small businesses should interpret these figures as a blip and not a trend. Export turnover is still up significantly on 2011 overall and there are growth opportunities available, particularly for bold and agile small and medium sized businesses.”

Indeed, although sectors such as manufacturing and distribution have experienced consistent turnover decline, the services and engineering sectors showed slight year-on-year increases.

“It’s encouraging to see the services sector holding up in the medium term yet it’s certainly worrying to see manufacturing and distribution performance falling and this has no doubt contributed to us entering the double dip”, says Peter.

“The ability of UK manufacturers to tap into global demand rather than sticking to the domestic market alone has been an important source of growth but many of these businesses will now be feeling the effects of the unstable Eurozone and a reduced demand from Europe, the US and Asia. Such businesses should focus on maintaining cashflow to ensure they can keep things ticking over”.