UK SME confidence slowly increasing » SMEInsider

UK SME confidence slowly increasing

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Confidence among SMEs has stabilized after a shaky period, according to the CBI. The latest  Quarterly SME trends survey showed that total domestic orders had slightly increased on the previous period.

However, the export figures weren’t quite so rosy, with a balance of respondents showing an 8% drop in export orders for the three months to April.

Rain Newton-Smith, CBI Director for Economics, said: “Higher spending on training is often a sign that skills shortages are biting again. This further underlines the need for business and government to work together in the coming months and make sure we get the design of the apprenticeship levy right, so it can deliver the quality skills training that firms need.”

The survey revealed that a net 15 per cent of SMES reported that employee numbers were higher than three months earlier. But the export figures were a cause for concern, according to Newton-Smith.

“While the depreciation of the Pound since mid-2015 will be welcomed by exporters, the Government could and should do more to help by establishing an exports commission that can look at the challenges and opportunities for exporters more closely.”

 

Summary of key findings:

  • 23% of small & medium sized enterprise (SME) manufacturers said they were more optimistic, while 18% said they were less optimistic, giving a balance of -+5%
  • 26% said their volume of output was up, and 25% said it was down, giving a balance of +1%. Companies expect output to increase in the next quarter (+17%)
  • 30% said their domestic orders were up, while 24% said they were down, giving a balance of +5%. Firms expect a slight strengthening in orders growth next quarter (+7%)
  • 17% said export orders rose over the past three months, 24% said they fell, leaving a balance of -8%, a slightly faster fall than in the previous quarter (-4%). Firms anticipate export orders to grow over the next three months (+23%)
  • Compared with three months earlier, firms were more optimistic about their exports prospects for the year ahead (+11%), the second consecutive quarter of improving sentiment (+13% in the three months to January)
  • The proportion of SME manufacturers citing concerns about political and economic conditions abroad as likely to limit export orders (32%) was broadly unchanged compared to the last quarter (31%), but remains above its long-run average (+22%)
  • Average export prices fell in the three months to April (-11%), but at a slightly slower pace than in the previous quarter (-25%). Export prices are expected to be broadly stable in the next quarter (-2%)
  • 31% of small and medium-sized manufacturers are employing more people than three months ago, and 16% less – leaving a balance of +15%
  • Plans for capital spending on plant and machinery in the year ahead (+5%) strengthened somewhat (-10 in the previous quarter), whereas investment in buildings (-6%) is expected to fall further (-18).