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Small manufacturers plan investment

Small manufacturers are planning to increase investment during 2014, according to a survey by the Confederation of British Industry (CBI).

The latest CBI SME Trends Survey of over 300 small and medium-sized manufacturers found that investment intentions were the highest in recent years:

  • Plans to spend on buildings hit a balance of +14 per cent, the strongest since the data began in October 1988
  • Plans to invest in plant and machinery also registered a +14 per cent balance, the strongest since July 1995.

Although the prospects for future investment are positive, the sector's performance in the three months to January 2014 was mixed: The survey showed that:

  • 37 per cent of firms saw an increase in total new orders and 23 per cent reported a decrease
  • 34 per cent reported increased domestic orders and 26 per cent said they decreased
  • The balance for domestic orders stands at +8 per cent, a slower rate of growth than in the last survey (+20 per cent)
  • 30 per cent reported declining export orders, while 23 per cent said they increased
  • 30 per cent of firms saw increased output but 24 per cent posted a decrease
  • Although employment grew (+4 per cent), faster growth was anticipated (+14 per cent).

Stephen Gifford, director of economics at the CBI, said:

"As the recovery takes hold, the investment cycle is starting to turn. It's encouraging to see small manufacturers planning to boost investment, particularly in their plant, machinery and buildings.

"Orders and output continued to grow at a healthy pace, although not as fast as predicted. However, firms remain optimistic about prospects, with growth in orders and production expected to accelerate."