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Exports stall for small and medium sized manufacturers

While small and medium sized manufactures in the UK have announced new job opportunities, increased orders and more domestic orders, they are still struggling when it comes to exporting goods.

According to the statistics from the CBI SME Trends Survey, domestic orders remained steady, but export orders show little sign of picking up. It is also predicted that domestic orders will continue to increase in the next quarter, but small and medium sized manufacturers remain pessimistic about the future for exporting.

A quarter of the 426 businesses surveyed stated their exports increased, but 28 per cent said they have fallen. These statistics are the same as the last quarter and companies expect the export market to remain unchanged in the near future.

Moreover, there was less optimism surrounding the future for exports in the coming year, and a number of firms expressed concerns over how the exports would be affected by political and economic conditions.

Export Challenges

There are several factors making exports a challenge for UK-based businesses. The increase in the Pound against the European currency means UK firms are less competitive, while the on-going financial problems in Greece are causing continued concern.

Katja Hall, CBI Deputy Director-General, said:

“Smaller manufacturers are reporting solid increases in output, orders and jobs. While growth was a little slower this quarter, they expect a pick-up in activity in the next three months.

“However, prospects for exporting to the rest of Europe remain a concern. Sterling’s recent rises against the Euro may mean more money in the back-pocket of holidaymakers, but it makes it that bit tougher for British manufacturers to stay competitive and sell inside the Eurozone.

“Business will also be keeping a close eye on how the Greek situation develops in the coming weeks.

New Government

However, with a new government about to be elected, firms are hopeful there will be a more concerted effort to develop a long-term export strategy for the future, and businesses hope that this will be adopted sooner rather than later, as the CBI makes it clear exports are key for helping to keep economic growth on track.

Employment Prospects and Output

Nevertheless, despite the continued negative outlook for exports, employment prospects are looking up. Job creation in the manufacturing sector continued in the last quarter and at better than average rates. Moreover, job creation is predicted to grow in the next three months as well.

Output was also on the increase; this trend is expected to continue into the next quarter.

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