Optimism amongst the UK's smaller manufacturers has surged to its highest level since records began in 1988, according to the latest SME Trends Survey from the CBI.
Small and medium-sized manufacturers reported that total orders and output rallied in the three months to April and output expectations for the next three months are at their highest level since January 1995. Numbers employed also saw a sharp boost and employment is expected to grow at an even stronger pace during the next quarter.
The CBI's survey of 366 SME manufacturers showed that domestic orders rose strongly, whilst export orders bounced back from a fall in the previous quarter. Both are expected to see robust growth in the next quarter.
The survey found that 46% of firms said they were more optimistic regarding their business situation, while 10% said they were less optimistic, giving a balance of +36%. This is the fourth consecutive rise in business optimism, with the survey balance the highest on record (since October 1988).
The key findings of the CBI report include:
- 39% of firms reported an increase in total new orders and 19% said they decreased, giving a balance of +20%;
- 36% of firms said domestic orders increased and 18% said they decreased, giving a balance of +18%;
- 25% of firms reported an increase in export orders and 16% said they fell, giving a balance of +9%, jumping back from a fall in the previous quarter, where the balance was -7%;
- 33% of firms said output increased and 16% said it decreased, giving a balance of +17%, with growth next quarter predicted to rise to its fastest level since January 1995 (+23%).
Katja Hall, CBI chief policy director, said: "It's very encouraging to see record levels of optimism among smaller manufacturers. As confidence beds in, we need to see more firms exporting their products to high-growth markets across the globe, giving a healthy and sustainable boost to the UK's recovery."