SMEs optimistic after strong quarterly growth
RECRUITMENT among small and medium sized manufacturers is growing at the fastest pace since records began, according to the latest CBI figures.
The SME Trends Survey said that 34% of firms reported increasing their staff levels in the three months to July this year. With 9% saying that it had decreased, it gives a balance of +24%, the strongest pace of growth since records first started being taken in October 1998.
Phill Machell, Ford & Stanley's Interim Managing Director, said that the figures confirmed what the company was seeing on the ground and that Britain was "back in business".
He said: "All the evidence is pointing to companies picking up their recruitment as they try and get ahead or stay ahead of their competitors.
"These figures confirm what we have been seeing at ground level this year, with demand really on the increase as companies try to secure the top talent that will take their businesses forward.
"British manufacturing is on the up and moving swiftly, and companies are having to reassess their recruitment policies all the time just to keep up."
According to the survey, the manufacturing sector experienced another strong quarter of orders and output growth, with domestic orders and output both rising sharply for the fourth consecutive quarter.
The outlook for the next quarter is also positive.
According to the Manufacturer magazine, smaller manufacturers plan to increase their investment in plant and machinery over the next year, while their expenditure on buildings is expected to stay broadly the same as last year.
Katja Hall, CBI deputy director-general, said: “Smaller manufacturers are settling into a regular growth pattern, with their order books and output growing for the fourth consecutive quarter.
“Firms remain upbeat about their business situation and they are hiring at their fastest rate since 1988.
“But export orders have under-performed this quarter, which may in part be because of the strength of Sterling.
“We need the Government to get behind our small and medium-sized manufacturers to help them to sell their products and services to new markets around the world, giving a sustainable boost to long-term growth.”
Key findings* – three months to July
- 36% of small and medium-sized manufacturers reported a rise in new orders, while 22% said they fell, giving a balance of +14%. Orders are expected to increase even more strongly next quarter (+26%)
- 31% of firms said that output increased, while 16% said that it decreased, giving a balance of +15%. Output is expected to grow again next quarter (+19%)
- 36% of firms reported a rise in domestic orders, while 19% said they fell, giving a balance of +17%. Domestic orders are expected to grow again next quarter (+24%)
- 18% of firms said export orders rose, while 20% said they fell, giving a balance of -2%, disappointing expectations of strong growth (+25%). Export order growth is expected to pick up next quarter (-2%)
- 31% of firms said they were more optimistic about their business situation, while 11% said they were less optimistic, giving a balance of +20%
- 34% of firms said that employment increased, while 9% said that it decreased, giving a balance of +24% – the strongest pace of growth since records began (October 1988)
- Firms plan to increase their investment on plant and machinery (+9%) in the year ahead, and plan to keep spending on buildings broadly unchanged (+2%)
- More firms highlighted labour shortages as a factor likely to limit capital expenditure (12%), the highest proportion since January 2013
- Average unit costs inflation slowed somewhat over the past three months (+5%, compared with +9% the quarter before)
- Domestic prices were broadly flat in the three months to July (-2%), while export prices fell at the fastest pace since October 2009 (-13%).