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SME manufacturers are positive about year ahead

SME manufacturers are expecting to see a rise in orders and production, the latest SME Trends Survey from the CBI reveals.

It is the first time since mid-2011 that business sentiment among the UK’s SME manufacturers has risen, and orders and production are expected to grow solidly over the next quarter.

356 business were surveyed, and a balance of +22% said they were more optimistic regarding the business situation in the three months to April.

Over the past three months the volume of total new orders rose modestly at +8%, and is expected to see faster growth over the next three months, driven by upturns in both domestic and export order growth.

Output, despite remaining flat for the second quarter running, is also expected to see a significant increase in the next three months.

Similarly, SMEs also expect to increase employment (+16%) in the next quarter, having held headcount steady in the three months to April.

Lucy Armstrong, Chair of the CBI’s SME Council, said: “Small and medium-sized manufacturers are feeling more optimistic for the first time in a year, an encouraging development given the important role that they play in our economy.

“Indeed, firms expect orders and output to rise strongly in the coming quarter and plan to invest more in the year ahead, pointing to growing momentum in manufacturing activity.

Firms also indicated raising investment intentions, as many plan to raise capital expenditure in the year ahead compared to the past twelve months, with investment intentions for plant and machinery turning positive (+13%) for the first time in a year.

Elsewhere, growth in average unit costs (+20%) continued to outpace broadly flat domestic and export output prices (+3% and +1%). However, domestic output prices are expected to rise in the next three months (+11%), and growth in costs is expected to ease slightly (+16%).

This was posted in Bdaily's Members' News section by Tom Keighley .