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February 06, 2015

SME manufacturers sell more on the home front

SME manufacturers sell more on the home frontSmall manufacturers in the UK have enjoyed an increase in domestic orders in the three months to January. However, their export orders have been broadly flat.

These are the findings of the latest SME Trends Survey from the CBI. The poll of 437 SMEs found that domestic orders increased for the sixth quarter running, while export orders were flat, despite expectations of a modest rise.

Domestic orders and output are both expected to grow again next quarter at a slightly stronger pace. In addition, smaller manufacturers are slightly more optimistic about their overseas trade prospects for the year ahead, and expect a modest pick-up in export orders.

The survey also showed that firms continued to create more jobs in the three months to January and employment in the sector is expected to grow more strongly over the next quarter.

The CBI’s key findings are:

  • 26% of SME manufacturers said they were more optimistic than three months ago, while 13% said they were less optimistic, giving a balance of +13%, up from +9% last quarter
  • 32% said their volume of output was up, and 19% said it was down, giving a balance of +13%, up from +9% in the previous quarter;
  • 35% said their domestic orders were up, while 20% said they were down, a balance of +15%;
  • 18% said export orders rose over the past three months, 21% said they fell, leaving a balance of -3%, compared with -13% last quarter;
  • The balance for expected export orders over the next three months was +6% and for expected domestic orders was +19%.

Rain Newton-Smith, CBI director of economics, said: “Smaller manufacturers are continuing along a steady growth path. The sharp fall in the oil price should also help ... But stagnant export orders are dragging on the sector’s performance, mainly because of the sluggish recovery and growing uncertainty in the Eurozone. Quantitative easing should inject some new life into Eurozone economies but it won’t be a miracle cure.”

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