Confident SME manufacturers mark improving UK economy
With small and medium enterprise (SME) manufacturers reporting higher levels of optimism, the UK economy continues to show signs of picking up.
SMEs in the UK are reporting record levels of confidence, according to new figures from the Confederation of British Industry (CBI), contributing to a flurry of encouraging news on the nation’s economy. According to the latest SME Trends Survey from the business organisation, optimism is at the highest level among small manufacturers since records began in 1988.
Total orders and output both having surged in the three months to April, while employment also jumped – and it is expected that the number of jobs in the sector will expand at a more dramatic rate over the next three months.
The overall figures come from the balance of companies returning positive and negative answers, so it is clear that recovery is not being felt by every business across every criteria. However, the overall picture looks more positive than it has at any time since the recession.
“It’s very encouraging to see record levels of optimism among smaller manufacturers, on the back of robust growth in domestic and export orders, and a leap in output levels,” says CBI chief policy director Katja Hall.
“As confidence beds in, we need to see more firms exporting their products to high-growth markets across the globe, giving a healthy and sustainable boost to the UK’s recovery.”
Similarly positive trends were recorded in another CBI study last month, which included larger manufacturers as well as smaller firms.
At the time, the Industrial Trends Survey reported that optimism had rocketed at a fast pace since 1973 after domestic and foreign demand rebounded. With consumer spending buoyant in the UK and exports returning to health, it appears that manufacturing in the UK is getting back on track.
The government has been making a point of supporting manufacturing at virtually every opportunity since it came to power. Chancellor George Osborne and business secretary Vince Cable have both said repeatedly that they want to rebalance the UK economy in favour of manufacturing, and boosting Britain’s output has been high on both of their agendas.
What’s more, it seems that the economy as a whole is gathering steam over the course of this year. This week, in its latest Economic Outlook study, the Organisation for Economic Co-operation and Development (OECD) boosted its forecast for the UK this year.
According to OECD, Britain is now expected to grow by an impressive 3.2 per cent over the course of 2014, faster than the US, Germany and France. However, it also warned that the government needs to be wary when providing stimulus for the property market, as rising house prices run the risk of getting out of control.
Bank of England governor Mark Carney has already said that the UK will have to see sustained growth over the long-term before it is clear the economy is back on its feet. Speaking to business leaders in the south-west last week, he said that will include seeing growth in every sector, as well as improvements in real-term wages. But overall, the outlook is positive.
“There is every sign that the recovery is starting to broaden out and I would describe our attitude at the moment as prudently optimistic,” he said.