New research from CEO organisation Vistage shows that 67% of CEOs in the manufacturing sector have reported significant improvement in financial conditions and increased optimism.
Optimism is being driven by hugely promising sales forecasts as a massive 83% of business leaders expect business revenue will increase in the next 12 months with no businesses expecting sales revenue to fall. The confidence in sales means that CEOs also expect a 70% increase in profits over the coming year.
In addition, 55% of CEOs plan to increase their expenditure on capital investments. A smaller proportion (37%) plan to maintain existing levels of investments, and only 8% reported plans to reduce investment in capex.
Employment is also looking-up in the sector, with over a half of CEOs reporting plans to increase their total numbers of employees in the next 12 months. A third expect to retain the same number of employees, while just 7% expect to reduce their staffing head count.
Steve Gilroy, CEO of Vistage, said: “These figures show the recent blossoming of confidence amongst Britain’s mid-sized manufacturing businesses, and are matched by my own conversations with dozens of CEOs and business owners in recent weeks at Vistage events around the UK. Business owners are reporting that they are investing again; they are recruiting; and many already have buoyant order books that they are now tooling up to deliver.”
He added: “Britain’s mid-sized businesses are key to the country’s prosperity, a skilled workforce and a balanced economy. Vistage’s latest research shows them to be very confident about the recovery and their prospects, leading them to invest strongly in capital assets and creating jobs. It is a very dramatic turn-around since the start of the year, and they are very much looking to 2014 being a good year.
“Oddly, despite their importance to the UK economy, these mid-sized businesses are virtually ignored by policy-makers and commentators. The recent political party conferences were a case in point – lots of rhetoric about start-ups, small businesses and footloose multinationals, but nothing about helping our all-important mid-sized.”
The research is based on responses by 88 CEOs, MDs and owners of largely mid-sized manufacturing businesses conducted in September 2013 by Vistage.