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SMEs confirm fall in domestic and export orders

Figures released by the CBI show a fall in output for small and medium-sized manufacturing businesses in the UK. The CBI SME trends survey also indicated a fall in export and domestic orders for the last quarter.

More than 400 small and medium-size companies were interviewed for the survey; the results showed there was a poor performance for output growth, but it is predicted that both domestic orders and output will perform better in the next quarter, and the decline in exports is expected to slow.

The latest figures also demonstrated that less people were employed in the last three months, and this trend is expected to continue into the new year.

According to the survey, businesses felt less optimistic about the future and they were less positive over the future for exports in the coming year. In addition, companies will be spending less on both product and process innovation in 2016.

The figures from the CBI revealed that 26% of SMEs manufacturers had a rise in orders, but 48% reported a fall; these figures are expected to improve slightly in next three months.

In addition, 25% of companies reported an increase in domestic orders while 36% reported a fall. And the 10% of companies said they had experienced an increase in export orders in the last quarter, while 46% stated export orders had fallen. This is the poorest performance since 2009.

Other key figures from the survey show 23% of manufacturers say output has increased, while 31% reported a fall, and 22% of companies remain optimistic about their business prospects in the future; 29% say they are less positive

Moreover, 23% of companies had increased their amount of employees, while 15% of SEMs had employed fewer people in the last quarter.

Commenting on the new figures Rain Newton-Smith, CBI Director of Economics, said:

“As demand has fallen, especially in the face of a strengthening Pound, our smaller manufacturers have had a tough quarter, with orders and output volumes dropping.

“Manufacturers expect conditions to stabilise somewhat over the quarter ahead, but remain concerned about the outlook for demand.

Newton-Smith went on to urge the government to include measures in its Comprehensive Spending Review to help improve skills and innovation in order to improve productivity in the coming year.

Overall growth

While the news for SMEs wasn’t overly positive, there was better news for growth overall as newly released figures from the CBI showed growth has increased by 4%, and GDP grew by 0.5% in the last quarter.

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