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SME activity on the up, says CBI

Small and medium-sized businesses can expect manufacturing activity to stabilize according to business lobbyists CBI, despite falls in orders and output.

Statistics released by CBI showed that although new orders fell by 13% in the last quarter, and domestic orders were down 11%, the outlook for the next quarter is looking up.

Output is expected to increase by a small percentage, while new orders are also expected to rise in the next three months.

Current demands have prompted positive predictions, with 5% increases in output expected, however business sentiment is still decreasing at a consistent pace.

Between August and October, optimism fell by 12% amongst SMEs, after a 13% drop in the three months up to July.

The quarterly report from CBI on SME trends also showed that optimism was also down 18% on export prospects for the coming year.

The Chair of CBI’s SME council, Lucy Armstrong, said: “Small and medium-sized manufacturers will be disappointed by the slide in demand during this quarter.

“Production levels have fallen for the second quarter running and profit margins continue to be squeezed, as output price inflation fails to match growth in costs.”

CBI surveyed 362 small and medium businesses to find that investment intentions had fallen, while output and export prices are expected to remain stable over the next few months.

Ms Armstrong added: “There are some signs of improving prospects going forward, with firms expecting to increase output slightly in the next three months and more positive investment intentions.

“But, the economic climate clearly remains tough, with businesses exposed to subdued conditions both at home and in our major export markets.”

This was posted in Bdaily's Members' News section by Miranda Dobson .