Small manufacturers bullish says CBI

ORDERS and output for small and medium-sized manufacturers continued to show strong growth in the three months to July, while hiring rates rose at record levels.

That’s according to the latest CBI’s SME Trends Survey, which reveals domestic orders and output both rose strongly, for a fourth month in a row, and are expected to grow again in the next three months.
 
Employee numbers in the sector shot up in the last quarter, recording the fastest pace of increase since records began in October 1988.

Firms’ optimism about their general business situation also rose, but to a lesser extent than in the last quarter.  However, despite the rise in export optimism, export orders were broadly flat in the three months to July, disappointing expectations for a strong increase.

The survey indicated too that fims plan to increase their investment in plant and machinery over the next year, while spending  on buildings is expected to stay broadly the same as last year.

Katja Hall, CBI deputy director-general, said: “Smaller manufacturers are settling into a regular growth pattern, with their order books and output growing for the fourth consecutive quarter.

“Firms remain upbeat about their business situation and they are hiring at their fastest rate since 1988. But export orders have underperformed this quarter, which may in part be because of the strength of Sterling.

“We need the Government to get behind our small and medium-sized manufacturers to help them to sell their products and services to new markets around the world, giving a sustainable boost to long-term growth.”

Key findings for the period include: 36% of respondees reported a rise in new orders, while 22% said they fell, giving a balance of +14%. Orders are expected to increase even more strongly next quarter (+26%); 36% reported a rise in domestic orders, while 19% said they fell, giving a balance of +17%; 34% of firms said that employment increased, while 9% said that it decreased, giving a balance of +24%.