Recovery continues for smaller manufacturers, despite weaker global picture

The CBI's latest SME Trends Survey has revealed that manufacturing output within small and medium-sized firms grew over the last three months, though less quickly than in the previous quarter, although demand for the goods made by the 406 manufacturers surveyed was stronger at home than abroad. Domestic orders rose for the fifth quarter in a row in the three months to October, while export orders fell sharply, defying firms' expectations of modest improvement. Prospects for the next three months are positive, with companies predicting export orders will stabilise and domestic orders will continue to grow. Fears that a lack of skilled workers will hold back firms' ability to meet demand is still above its long-run average, but concern has been tempered. The survey's findings include: 26% of small & medium sized enterprise (SME) manufacturers said they were more optimistic than three months ago, while 16% said they were less optimistic. The rounded balance of +9% is the weakest since July 2013 when it was also +9%. Also, 28% said their volume of output was up, and 19% said it was down, giving a balance of +9%, which compares with +15% in the previous quarter. With regards to domestic orders, - 36% said they were up, while 22% said there was a decrease, a balance of +14%. Average unit costs and domestic prices were both broadly flat over the three months to October at +3% and -3%, respectively. Export prices fell slightly stronger than expected -8%, but are expected to be broadly stable -3% in the three months to January.


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