UK manufacturing SMEs are at their most confident for 18 months and are ready to invest in preparation for an expected upturn in demand. Over half of small manufacturers questioned in a recent survey expect to be spending over the coming six months as belief in sustainable growth rises.
The statistics are revealed in the latest Manufacturing Advisory Service (MAS) Barometer which sought the opinions of 89 SMEs in the sector. Of these 57 per cent said they would be investing in machinery and business premises in order to take advantage of opportunities at home and abroad.
When questioned about sales, 48 per cent of SMEs reported an increase during the first half of 2013, while 67 per cent expect further sales growth over the coming six months. In addition factory output rose by 0.7 per cent during the second quarter, while manufacturing activity grew at its fastest rate in two and a half years during July.
Government Minister Michael Fallon has said the survey shows that the economy is finally heading in the right direction.
“It is particularly encouraging to see that confidence is returning and manufacturers are becoming more optimistic about their future growth,” he said.
The news is particularly encouraging for the Midlands where motor manufacturing is among the sectors showing the strongest growth. Only last month it was reported that demand for industrial property in the region has undergone a “seismic shift” during 2013.
This appears to be a reflection of market trends generally, with the FT reporting spending on warehouses, logistics hubs and small factories returning to pre-recession levels.
While the recovery is still in its early days, the CBI this week raised hopes by increasing its growth forecast for 2013 from 1 per cent to 1.2 per cent and from 2 per cent to 2.3 per cent for 2014.
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