CBI: UK SMEs optimistic, with orders set to grow

Posted on 8 May 2012

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.

Of the 356 respondents to CBI’s latest SME Trends Survey, 22% said they were more optimistic regarding the business situation in the three months to April. This figure represents the first rise in sentiment in a year (it was +12% in April 2011).

Over the past three months the volume of total new orders rose modestly (+8%), and is expected to see faster growth over the next three months (+27%), driven by upturns in both domestic (+22%) and export order (+23%) growth.

Output and employment are also expected to see a significant increase in the next three months (+19% and +16% respectively).

Lucy Armstrong, chair of the CBI’s SME Council, said: “Small and medium-sized manufacturers are feeling more optimistic for the first time in a year, an encouraging development given the important role that they play in our economy.”

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 (+13%) for the first time in a year.

Armstrong continued: “Firms expect orders and output to rise strongly in the coming quarter and plan to invest more in the year ahead, pointing to growing momentum in manufacturing activity.”

Although they expect export orders to rise, concern about political and economic conditions limiting export demand has continued to pick up.


Photo by Cory M. Grenier