As many as a fifth of small manufacturing firms are already experiencing an upturn in business conditions but finance issues continue to impede upon recovery, according to research by the Forum of Private Businesses.
The trade organisation found 20 per cent are currently enjoying more orders while 50 per cent expect a rise before September 2010. Thirty-nine per cent plan to take on more staff in the same time frame and five per cent are already doing so.
But things would be even better if not for the perpetual constraints to credit that the banks have inflicted upon UK business since the downturn took hold.
Sixty-six per cent of respondents to the FPB said the cost of finance has increased since the beginning of the year, with only 16 per cent of respondents witnessing a fall. For 52 per cent of businesses access to working capital has been harder while it has been easier for just three per cent.
Respondents called for the cost of credit to be reduced and for more access to impartial financial advice.
Phil McCabe is a spokesman for the FPB. “There has been much debate recently over the current condition of the manufacturing industry, with some research suggesting an upturn in its fortunes but other figures suggesting production has slowed,” he said.
“Our figures appear to show that many smaller manufacturers are indeed seeing an increase in business and are generally optimistic for the future, which has got to be welcomed. However, the lack of available and affordable credit remains a huge problem for the sector and we would urge the banks and major lenders to do everything they can to help manufacturers at this crucial time.”
The FPB surveys its members on a quarterly basis.