Manufacturers show greater appetite to invest as funding concerns ease – Lloyds
MANUFACTURING firms are showing a strong appetite to invest in new machinery and capitalise on growth opportunities in the next 12 months, as concerns about access to funding diminish, according to a new survey.
Nearly two thirds of the SME manufacturers questioned as part of the study by Lloyds Bank Commercial Banking, no longer feel that accessing funding from lenders is a challenge for their sector, echoing the encouraging confidence in the industry as the growth of output and new orders continues.
To capitalise on the new business opportunities emerging, 73% of manufacturers are planning to invest in new plant and machinery in the next 12 months to help further enhance their production capabilities, with almost half of business (45%) set to use their existing cash reserves to expand.
Most (90%) of the SMEs surveyed expect to have a number of new job openings arise in the next six months to help meet growing customer demand and to secure the long-term success of the industry, nearly two thirds (64%) of manufacturers agreed there is a need for more apprentice schemes to address the growing skills gap in the industry.
According to the findings of the survey, nearly three quarters (73%) are intending to look overseas for new growth opportunities in 2014, while 27% of manufacturers are intending to reshore their operations back to the UK over the next year.
The survey was carried out at the Lloyds Bank sponsored MACH 2014 exhibition in April, where manufacturers and engineering business shared the latest advances in technology designed to help firms develop and grow.
Richard Holden, Head of Manufacturing at Lloyds Bank Commercial Banking, said: “Hearing that manufacturers are set to drive forward plans to invest in new machinery and are creating a number of new job opportunities is not only a boost for the economy, but a significant sign of progress in an industry that was hit hard during the downturn.
“The findings show that there is a considerable demand for new apprentices to overcome the projected shortage of engineers in the manufacturing industry, and this is why Lloyds Bank recently launched a £1m-a-year sponsorship of the Advanced Manufacturing Training Centre (AMTC) at the Manufacturing Technology Centre in Coventry to develop more than 1,000 engineering apprentices and trainees to help close the skills gap.
“The manufacturing sector is the cornerstone of the UK economy and is showing encouraging signs of resurgence. We are committed to supporting SME businesses with the appetite to accelerate their expansion plans with the right funding solution to help them generate long-term success.”
Elsewhere, a new survey by the CBI claims business optimism among manufacturers is now at its highest since the 1970s.
It said the sector had seen its sharpest improvement since 1973 on the back of strong growth in orders at home and abroad.
The organisation’s quarterly Industrial Trends Survey found that in the three months to April, total growth in order books and domestic orders was the fastest since 1995.
Export orders also grew strongly, while investment intentions for the year ahead remained particularly robust. Output growth was solid again for the second consecutive quarter, while employment rose at the strongest rate since October 2011.
Firms are upbeat about the current quarter, with growth expectations for domestic orders and output also the highest since the 1970s. Optimism about export prospects for the year ahead also rose strongly.
