The latest news for the financial sector.
Inflationary swings and output roundabouts
Manufacturers are still experiencing growth in demand but inflationary pressures are in danger of derailing the sector’s recovery, the latest Quarterly Industrial Trends Survey from the Confederation of British Industry suggests.
In Q1 2011, manufacturers witnessed the strongest growth in domestic and export demand since April 1995 with a +20 per cent balance. In response, employment went up for the third quarter in a row and output is expected to climb for a balance of +22 per cent of companies over the next three months However, production costs have gone up markedly, with average unit costs up for a huge balance of +53 per cent of manufacturers. As a result, domestic and export prices are up for balances of +29% and +30% of companies respectively – the biggest rise for the latter since April 1984. Prices are expected to increase sharply again over the next three months.
This story was largely consistent with the tale told by smaller manufacturers in the CBI’s Quarterly SME Trends survey, released at the start of May.
Manufacturers buck insolvency fears trend
The number of manufacturing companies deemed to be in financial distress dropped in the first quarter of 2011 – significantly in some areas – although the number across all business sectors went up.
Insolvency experts Begbies Traynor’s Red Flag Alert shows the number of food and drink manufacturers with ‘significant’ or ‘critical’ financial problems was 42 per cent lower in the first three months of this year compared to the final three months of 2010. There were 14 per cent less automotive companies in difficulty, 11 per cent less print and packaging and 15 per cent less in all other manufacturing sectors.
Conversely, there was a 26 per cent increase from Q4 2010 to Q1 2011 when all business types were taken into account.
HSBC’s Business Thinking – now open for entries
Thinking businesses across the South of the UK could each be awarded a financial reward of up to £120,000 and be invited to take part in an overseas Thought Exchange Trip for networking and business development by entering Business Thinking, courtesy of HSBC Commercial Banking.
The winning entrants will gain insight and knowledge from business leaders around the world and have the chance to double their initial financial reward by being crowned overall Business Thinking winner at an International Insights gala.
Businesses with turnovers of £2million or more can log onto www.hsbc.co.uk/businessthinking to find out more. Closing date July 10 2011.
The 132 year old company, which trades under the name Ilford Photo, employs around 260 people at its manufacturing base in Kutsford and has an annual turnover of £23m. With the rise of digital imaging, demand for HARMAN’s core monochrome analog film products have waned in recent years though its specialism in this area means the company will continue to serve the market.
They pledged adherence to a new Lending Code for micro-businesses, lending principles for larger SMEs, and a monitoring and appeals process for declined loan requests. These are part of the Better Business Finance campaign launched by the banks.
Commenting, EEF chief executive Terry Scuoler said: “The new Lending Code and lending principles show genuine intent from the UK’s major banks in addressing the fraught relations with business.”