SMEs cautiously optimistic about future

7 November 2012

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7 November 2012 | Adam Leach

SMEs in England are looking forward to business picking up over the next six months with just less than half looking to invest in new machinery to support this growth.

The Manufacturing Advisory Service (MAS) Barometer, published on Monday, found 55 per cent of respondents expect to grow in the period between October and March 2013, while 41 per cent expect to increase investment in machinery.

Lorraine Holmes, area director for the Manufacturing Advisory Service, said: “Manufacturers have been reporting fluctuating demand and softening in certain sectors so to see the renewed optimism suggests many believe these markets are coming back on stream.”

The study, which is based on the responses of 607 SMEs based in England, also provided an insight into who suppliers are looking to sell to. Contracts for materials and general engineering are the most sought after, with 42 per cent of respondents expecting to do business in the sector, followed by automotive with 39 per cent and defence at 35 per cent of respondents.

Asked to look further ahead to 2016, respondents identified aerospace, marine, offshore wind and the rail sector as areas that they expect will grow from moderate sales levels to significant.

Asked to identify the biggest challenges in entering new markets, respondents cited market knowledge as the biggest challenge in seven out of 12 sectors. These were aerospace, chemical, electronics, marine, offshore wind, pharmaceutical and rail. Material costs were chosen as the biggest barrier for entering the agri-food sector.

The CBI also published its latest SME Trends Survey which found over the past quarter both domestic and export orders fell. The survey found total new orders for the SME sector had declined by 13 per cent, while export orders had dropped by 21 per cent.

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