The latest SME Trends survey from the CBI (Confederation of British Industry) released today makes for bleak reading with a balance of 27 per cent of manufacturers expecting to cut jobs next quarter.
Based on the CBI’s quarterly survey of UK manufacturers with under 500 staff, demand from both home and abroad has reportedly weakened significantly with a balance of -40 per cent for domestic orders and -16 for exports in the third quarter of the year. Total new orders were down for a balance of 33 per cent of firms.
This situation will get worse next quarter, according to the survey, when 35 per cent of firms, on balance, will see orders fall.
Output was also down between July and September. Twenty-four per cent saw a fall this time around compared with nine per cent when reporting quarter two.
Russel Griggs, Chairman of the CBI’s SME Council said: “After more than a year of steady growth on the jobs front, we are now starting to see SMEs reducing their headcount in response to weakening demand in the face of global economic slowdown.
“Given the speed at which the downturn has hit every sector of the economy it is not surprising that small and medium-sized businesses are also seeing orders and output hit despite the relief provided by falling commodity prices.
“It is worrying that more SMEs are finding a lack of credit affecting business decisions. But the bold rate cuts of recent weeks and measures to support SMEs should help prevent a further credit squeeze but the impact is unlikely to be immediate.”