EEF calls for action to ease credit squeeze

CREDIT conditions for North West manufacturers eased slightly at the beginning of this year compared with the end of 2011, industry organisation EEF says.

A survey of more than 200 manufacturers reveals continuing concerns over cost and availability of finance.
 
Despite the pick-up in the first weeks of 2012, the EEF says more still needs to be done to address the issue, which is felt more acutely by smaller businesses.

The organisation is urging the government to ensure the National Loan Guarantee Scheme is rolled-out through bank networks and better communicated.

EEF’s Q1 Credit Conditions Survey shows a small improvement in the availability of new lines of borrowing over the past two months, but little change in views on the overall cost of credit among manufacturers.  
 
The balance of 3% of companies saying the availability of new lines of borrowing has improved is a turnaround from the 3% balance reporting a decline last quarter.  But this is still down on the position in the third quarter of 2011.

EEF North West region director, David Ost, said: “We have to view an improvement in credit conditions as positive, but the absence of a trend showing that availability is increasing and costs are coming down on a consistent quarter on quarter basis indicates that there is more work to be done.  
 
“There are a number of initiatives in train from government and the banks with the National Loan Guarantee scheme set to be the next off the rank.  This must have an impact on the cost of borrowing which translates into a greater appetite amongst firms to approach banks for finance.”  
 
“The growth in business investment that our economy needs is contingent on manufacturers having the confidence to commit to their capital expenditure plans and being able to access finance at the right price.”