Confidence among smaller manufacturers soars

CONFIDENCE among smaller manufacturers has rocketed to its highest level since records began in 1988, according to a key survey.

The CBI’s latest SME Trends Survey polled more than 360 firms between late March and early April, and found a positive picture of increasing orders, output and employment.

The survey of SME manufacturers showed that domestic orders rose strongly in the three months to march 31, while export orders bounced back from a fall in the previous quarter. Both are expected to see robust growth in the current quarter.

Output grew solidly for the third consecutive quarter, with output expectations for the next three months at their highest level since January 1995.

While investment intentions for buildings in the year ahead are flat, spending on new plant and machinery is strong and at its highest level since July 1995.

Katja Hall, chief policy director at CBI 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.”

The key findings of the SME Trends survey are: 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%.

On the question of optimism, 46% of respondents said they were more positive regarding their business situation, while 10% said they were less so, 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%).