As per the reports of quarterly SME Trends Survey, conducted by Confederation of British Industry, the past 3 months orders and output among the UK’s small- and medium-sized manufacturers grew at their fastest rate in 15 years.
Of the total 403 SMEs, fastest growth was reported since April 1995, with 41% output rise in the three months to July, while 20% reported a fall. The resulting balance of +21% is an improvement on the previous quarter’s balance of +3%.
The volume of total new orders also grew strongly, with 37% of firms saying it rose (highest since July 1995), and 24% saying it dropped, giving a balance of +13%, which is +10% up from the last quarter.
CBI also found that medium-sized companies are predicting a drop in demand and output in the next quarter.
For the next three months, due to the weakening of trends in domestic and export orders, firms anticipate a slight fall in output (-5%), by a balance of -5% and -3% respectively. As a result, total orders are expected to fall (-4%).
The CBI said 79% of firms believe a drop in demand will limit output, up from 76% last quarter.
With 4% of firms citing credit or finance constraints as likely to limit export orders, (compared with 12% in the previous quarter), concerns over access to credit eased during the last quarter. This is now in line with the long-run average, the CBI said.
In the next year, firms plan to spend less on the amount they invest in buildings
(-23%), plant and machinery (-19%), and product and process innovation (-6%) compared to the past year, but the spending on training and retraining is expected to be same relative to the past year (-2%).