Business Planning

Small business income on the up as growth continues to be spread across the UK

Rebecca Smith | 11 August 2015 | 9 years ago

Growth is fairly broadly spread across regions,  with the South West,  London and the East Midlands seeing the highest increases over the past year
Growth is fairly broadly spread across regions, with the South West, London and the East Midlands seeing the highest increases over the past year
Business income was 4.7 per cent higher in the first six months of the year than in the same period for 2014, according to Barclays‘ Small Business Income Index.

It indicated a strong half for business activity, though it also signalled a return to more typical growth rates than had been seen across the past couple of years.

In January 2015, small firms reported the highest rise in annual income since the turn of the century. At the end of 2014, an analysis of the current accounts of Barclays’ small business customers found that income levels were up eight per cent on 2013. Since 2000, revenue levels have increased some 20 per cent.

SME income increased for Q2 2015, but at a slower rate at 0.1 per cent during the second quarter of 2015 when compared to the first quarter. It was though, up 3.9 per cent when set against the same period in 2014.

The data found that recent growth has been strongest for firms involved with construction activity, healthcare and transport. Those industries which are heavily reliant on capital or discretionary consumer spending, such as hospitality, property and construction, have been experiencing some of the strongest growth in activity.

There was also a spread of growth across different regions, with the South West, London and East Midlands seeing the highest increase during the past year, and the North West and South East also both coming in above average.

Income index 2

Adam Rowse, head of business banking at Barclays, said: Our business data shows that the incomes of small and medium-sized enterprises in England and Wales continued to steadily increase in the second quarter of this year.

He added that they were now over four per cent higher than a year ago and nearly one quarter larger than in 2010.

Rowse also pointed out that the slowing income growth over the past 12 to 18 months was to be expected as the wider economic recovery enters a more mature phase. The improving outlook for the UK, with the economy growing an estimated 0.7 per cent during the second quarter, also presents huge opportunities for UK businesses to grow.

As employment currently remains close to record levels, consumer confidence has been given a considerable boost, which in turns brings opportunities for businesses to capitalise on growth? according to Rowse.

While the outlook remains positive, Rowse acknowledged several factors which could prove obstacles to growth for small firms, such as productivity and output per worker, as well as the potential for rising inflation in the future. He advised that business owners be confident in their plans to maximise the opportunities that come their way”, as well as to prepare and adapt as best they can for any hurdles.

Image: Shutterstock

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