Optimism about the business situation among smaller manufacturers has risen at the fastest pace since records began in 1988, according to the CBI’s latest SME Trends Survey
The survey found that total new orders increased in the three months to October for the first time since July 2012. This increase was driven by domestic orders, which rose at their fastest rate since January 1995. Forty-two percent of firms reported an increase in total new orders, with export orders rising at their fastest rate since April 2011.
Optimism around export prospects for the next 12 months increased strongly, in addition to a modest increase in output which is expected to pick up at a faster pace in the next three months, alongside a further increase in orders.
Stephen Gifford, director of economics at the CBI, said:
“This has been a positive quarter for small and medium-sized manufacturers, with new orders and output both on the rise, and further improvements expected next quarter.
“Optimism about the general business situation has improved at a record pace, and there is evidence of a general thaw in investment intentions for the year ahead.”
The survey also found that manufacturers’ investment intentions are up on the previous quarter. Plans to spend more on buildings have increased by 5%, while plans to spend more on plant and machinery are up by 11%, and planned spending on products and process innovation has increased by 21%. Numbers of people employed also increased by 7%.
This is the latest in a string of surveys indicating that the UK economy may be recovering, however, a joint survey by the accountants KPMG and the housing charity Shelter has found that just one in ten people are feeling any benefit from this recovery.
One of the major concerns highlighted by the report was the increasing numbers of people turning to payday loans to cover their costs. Peter Tutton, head of policy at the debt charity StepChange spoke to MPs, stating:
“It's not just about the growth of the market... the number of people we're seeing with payday loan debts has grown eight-fold, so we're seeing a much bigger growth in problems than just the growth of the market.”