Over half of the 607 companies questioned by MAS for its third Barometer (July to September) are predicting sales to grow over the next six months, with 41 percent set to step-up investments in facilities and equipment.
Over a third of those questioned also pointed to new technology as being a source of future investment.
Though those businesses to report increasing sales fell by nearly eight percent when compared to the previous Barometer, future sales, especially in aerospace, marine, off-shore wind and rail, all appear to be growth areas.
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Area Director for the Manufacturing Advisory Service, Lorraine Holmes stated:
“It’s reassuring to see more SMEs are expecting to increase their sales going forward and this despite a slight fall over the last six months.
“Manufacturers have been reporting fluctuating demand and softening in certain sectors, so to see the renewed optimism suggests many believe these markets are coming back on stream. Eighty-six percent of companies told us that they intend to maintain or increase their workforce, which shows a general stability in these figures.”
Business Minister Michael Fallon echoed Homes’ sentiments:
“It’s encouraging to hear of the optimism among manufacturing SMEs in this Barometer. Of course, these are still challenging times, but the recent GDP output is the latest sign yet that the wider economy is starting to recover.”
A ‘Special Focus’ formed part of the latest survey, aimed at identifying which sectors SMEs are typically selling into. The results found materials/general engineering at the top (with 42 percent), closely followed by automotive (39 percent) and defence (35 percent).
Another key area involved looking at potential barriers to growth for those businesses looking to enter specific industries. Market knowledge revealed itself to be the primary barrier for seven of the 12 sectors listed (aerospace, chemical, electronics, marine off-shore wind, pharmaceutical and rail), with materials costs coming out on top for food and materials/engineering.
“Twenty-six percent of the companies we questioned classed themselves as advanced manufacturers and there is a definite trend suggesting that SMEs are generally adding more value by converting material.
“I don’t think anyone will be surprised that market knowledge was the biggest barrier for firms across seven sectors, as this can be difficult information to access and interpret.
“MAS can help with this as we have a number of sector specialists who will be able to provide valuable insight and the right contacts to help SMEs get started in new markets.”