Partner Article

SMEs concerned over market conditions

Manufacturers in the UK have reported a worrying deterioration in business conditions, as well as general pessimistic outlook on industry as output falls.

28% of manufacturers surveyed in CBI’s SME Trends Survey said that output volumes had fallen between May and July this year.

Despite this being contradicted by 23% of respondents saying that output was increasing, the result is a 5% fall; the first since October 2009.

SMEs affected by this downturn in conditions have found their optimism dwindling, and figures for the future are not set to improve as plans to invest do not look strong.

Investors for the next 12 months have suggested that they plan to lower capital expenditure, with intentions to spend in the plant and machinery sector down by 13%. This is the weakest investment forecast in three years.

13 % of small business owners said that they felt disheartened in their outlook to business as a result of these figures.

Lucy Armstrong, who is Chair of the CBI’s SME Council, said:“Challenging domestic conditions, continuing uncertainty over the Eurozone, and a broader loss of momentum in global growth, are clearly taking their toll on the UK’s smaller manufacturers.

“Production has fallen over the last three months and sentiment has deteriorated, while growth in demand has stalled, with little improvement expected in the coming quarter.

“Nonetheless, smaller manufacturers have stuck by their plans to take on more staff – an increase in numbers employed is perhaps one of the few bright spots in an otherwise muted picture.”

A rise in recruitment is the silver lining to these figures and predictions, and SMEs plans increase the number of workers in their businesses by 11% is a positive step for potential employees.

Image by Alex E. Proimos

This was posted in Bdaily's Members' News section by Miranda Dobson .