Optimism soars amongst smaller manufacturers on back of strong growth in orders and output
6 May 2014 09:57 AM
Optimism amongst the UK’s smaller
manufacturers has surged to its highest level since records began in 1988,
according to the CBI’s latest SME Trends
Survey.
That’s on the back of small and medium-sized
manufacturers saying that total orders and output rallied in the three months
to April.
Numbers employed also enjoyed a sharp boost, and
employment is expected to grow at an even stronger pace during the next
quarter.
The
survey of 366 SME manufacturers showed that domestic orders rose strongly,
whilst export orders bounced back from a fall in the previous quarter. Both are
expected to see robust growth in the next quarter.
Output grew solidly for the third consecutive quarter,
with output expectations for the next three months at their highest level since
January 1995.
Firms’ investment intentions for buildings in the
year ahead are flat, but spending for plant & machinery remains firmly
positive, at its strongest level since July 1995.
Katja Hall, CBI Chief Policy Director,
said:
“It’s very encouraging to see record levels
of optimism among smaller manufacturers, on the back of robust growth in
domestic and export orders, and a leap in output levels.
“Hiring is also on the up, and is set to
strengthen as we look ahead into 2014.
“As confidence beds in, we need to see more firms
exporting their products to high-growth markets across the globe, giving a
healthy and sustainable boost to the UK’s
recovery.”
Key findings – three months to
April
- 39%
of firms reported an increase in total new orders and 19% said they decreased,
giving a balance of +20%
- 36%
of firms said domestic orders increased and 18% said they decreased, giving a
balance of +18%
- 25%
of firms reported an increase in export orders and 16% said they fell, giving a
balance of +9%, jumping back from a fall in the previous quarter, where the
balance was -7%
- 33%
of firms said output increased and 16% said it decreased, giving a balance of
+17%, with growth next quarter predicted to rise to its fastest pace since
January 1995 (+23%)
- 46%
of firms said they were more optimistic regarding their business situation,
while 10% said they were less optimistic, giving a balance of +36%. This was
the fourth consecutive rise in business optimism, with the survey balance the
highest on record (since October 1988)
- Optimism about export prospects rose for the fifth
consecutive quarter to a balance of +26%
- Numbers employed rose sharply (+16%), outpacing
expectations (+6%). Robust growth in headcount is expected in the coming
quarter (+24%)
- Manufacturers’ investment intentions remain well
above their long-run averages. Plans to invest in buildings in the year ahead
(relative to the last twelve years) were broadly unchanged (-3%) while plant
and machinery investment intentions remained firmly positive, and at their
strongest since July 1995 (+14%)
- Average unit costs rose moderately (+9%), after having
been flat in the previous quarter and are set to pick up further next quarter
(+16%)
- Average domestic prices increased slightly (+9%), after
having stayed largely unchanged for two years, and modest growth is set to
continue in the next three months (+9%). Export prices remained broadly flat
(-2%), and are expected to remain unchanged over the next quarter
(-3%).
Notes to Editors:
The
CBI SME Trends Survey was conducted between 24 March and 09 April 2014. 366
smaller manufacturing firms replied. During the survey period, the pound
averaged €1.21 and $1.66, while Brent Crude averaged $107 per barrel,
compared with €1.20 and $1.64, and $110 per barrel in the January survey
period.
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