SME activity increases

25/04/2007  17:17:33

A recent report indicates that small to medium sized enterprises (SMEs) in the UK enjoyed increased activity during the first quarter.

The PKF SME Index, which investigates the performances of 800 SMEs in the construction, manufacturing and service sectors, found that business output increased from 55.8 in the fourth quarter of 2006 to 56.0 in the first three months of 2007, reports Business News.

With any figure above 50 denoting expansion, business start-ups appear to be having a good time of it.

The manufacturing sector enjoyed the greatest improvement in output, while the service market was also buoyant, thanks in large part to increased customer demand and more effective marketing.

Stuart Barnsdall, a partner at PKF, said that a number of factors will keep growth and business start-ups somewhat in check over coming months.

"SMEs across the UK continue to perform robustly, but ever-increasing costs of raw materials are forcing businesses to put up their prices," he said.

"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."

New business orders were slightly down during the period from 55.7 to 55.2.

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