08 May 2012
SME manufacturers expecting a spike in orders and output, says CBI
Business sentiment among the UK's small and medium-sized manufacturers rose for the first time since mid-2011, and orders and production are expected to grow solidly over the next quarter.
In the CBI's latest quarterly SME Trends Survey, a balance of +22% said they were more optimistic regarding the business situation – a figure that represents the first rise in sentiment in a year.
Over the past three months the volume of total new orders rose modestly and is expected to see faster growth over the next three months, driven by upturns in both domestic and export order growth.
Output was broadly flat for the second quarter running but, like orders, is expected to see a significant increase in the next three months. Similarly, SMEs also expect to increase employment in the next quarter, having held headcount steady in the three months to April.
With sentiment recovering, firms are also raising their investment intentions. Respondents plan to raise capital expenditure in the year ahead compared to the past twelve months, with investment intentions for plant and machinery turning positive for the first time in a year.
Lucy Armstrong (pictured), chair of the CBI's SME Council, said the optimism among SMEs for the first time in a year was an encouraging development given the important role they played in the UK economy.
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