The Confederation of British Industry (CBI) has released its latest SME Trends Survey which shows a ‘firm rise’ in new orders and robust hiring intentions.
Canvassing almost 400 SME manufacturers, the survey gives an idea how the industry is shaping up from the last quarter, and how these organisations see business progressing in the short term and beyond.
SME manufacturers have reported healthy increases in new orders over the last three months, with 35% saying their domestic orders have gone up, compared to 22% who said they had experienced a downturn.
For export orders too, there were many more manufacturers who reported an increase in this respect (30%), than those who said their export orders fell (11%). The balance of manufacturing companies surveyed was also positive about fortunes for export orders in the next three months, with +23% of SME manufacturers believing they will edge higher over the next quarter.
However, the results of the SME Trends Survey was mixed, with firms reporting that they plan to cut back on investment in buildings, although it still remains above the long-run averages.
Output growth has slowed down in the last quarter, which is in line with other reports for manufacturing growth. Companies are expecting this to pick up in the next three months though.
The SME Trends Survey does show that manufacturers aren’t as optimistic as they have been previously, with this deteriorating for the first time in more than 12 months; 13% of respondents said they were more optimistic, while 19% were less so.
That being said, more than a third are employing more people than they were three months ago, and many expect to see this remain robust moving forward, which gives an indication as to how the industry is performing.
The CBI’s Principal Economist, Alpesh Paleja, said that the chancellor can use his budget to help manufacturing companies.
“The latest survey suggests mixed fortunes for our smaller manufacturers. While growth in new orders has held up and headcount has risen strongly, output growth has lost some steam over the last quarter.
“Coupled with ongoing pressure from labour shortages, it’s understandable that optimism among manufacturers has fallen.
“The chancellor should use the budget to fire up our factories by reforming business rates and setting out a clear plan to bring the UK’s industrial strategy to life.”