Bank lending cost hikes starting to ease, say manufacturers

THE region’s manufacturers have said that credit conditions have started to improve for the first time in a year.

A survey by the Engineering Employers’ Federation showed that the proportion of companies reporting fee increases and interest rate rises on existing facilities has started to move downwards. However, the percentage of companies actually seeing costs fall remains unmoved.

EEF North West Region Director, David Ost, said: “Any sign of improvement in access to finance is welcome and the survey suggests Industry may be past the worst of the problems. However, we are not out of the woods yet.”

For instance, the survey showed that although the number of firms reporting increases in credit costs fell to 20% (from 30% in the previous quarter, the number of firms actually reporting a drop in credit costs was still only 2.3%.

“Banks, Industry and government need to push ahead with efforts to bring down the cost of borrowing and get credit flowing more freely to those companies that need it,” said Ost.

“The window of opportunity to address this will not remain open indefinitely and failure to take action now risks weakening economic growth over the rest of this Parliament.”

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