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Orders stabilise for SMEs

The latest figures from the CBI shows that orders for small and medium manufacturers stabilised over the last quarter, and SMEs say they have a greater optimism regarding export orders as the year develops.

However, the survey of 426 companies showed that orders were flat during the last quarter; there was also a fall in export orders, and a significant reduction in export prices, but it is predicted that domestic orders and exports will grow in the near future.

Despite this, the companies surveyed expect to spend more on training and investment throughout the next 12 months, and employment growth is steady.  The CBI SME Trends Survey also indicates that manufacturers intend to invest more in product innovation and training.

Commenting on the survey, CBI Director Rain Newton-Smith said:

“It’s encouraging to see smaller manufacturers’ optimism and orders stabilising, although the picture remains fairly flat across the board with many firms treading water.

“But there are expectations that domestic orders and exports growth will pick up in the next quarter and many smaller manufacturing firms also plan to invest more in their staff training.”

Key Statistics

The key statistics show that 24% of SMEs report a greater optimism, while 25% were less so; 30% of firms reported an improved output, while 23 % noted a fall. In addition, 21% of SMEs reported an increase in export orders, while 25% stated there was a decrease.

UK Economic Growth

Looking at the wider picture, there was a weakening of economic growth in the last quarter according to the 759 manufacturing, retail and services companies surveyed as part of the CBI Growth Indicator.

Rain Newton-Smith stated:

“Manufacturing and business and professional services have struggled to make a mark, but a healthier picture can be seen in the household-focused consumer services and retail sectors.”

Government initiatives and the future of manufacturing

While manufacturing struggles to gain momentum, there have been a number of government innovations to help improve the fortunes of the sector, including research and development tax credits.

However, a recent survey from the EEF showed that 60% manufacturers felt the government could do more to improve business access to scientific research, and while the introduction of Catapult centres, which aim to enhance access to research and development facilities for the sector have proven popular, the majority of manufacturers (69%) feel the government could do more when it comes to commercialising technology.

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