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February 07, 2014

Smaller manufacturers plan investment boost

Smaller manufacturers plan investment boostThe UK's smaller manufacturers plan to invest more in building upgrades and new equipment in 2014, according to the CBI's latest SME Trends Survey.

The CBI survey shows that manufacturers are planning to invest more in the coming quarter. The balance of firms planning to spend on buildings is +14% – the strongest finding since the CBI started its survey in 1988. In addition, the balance of manufacturers planning to invest more in plant and machinery is also +14%, the strongest result since July 1995.

These findings come as manufacturers are seeing increasing numbers of orders and rising output volumes. Key findings of the survey, which covers the three months to January 2014, include:

  • 37% of firms reported an increase in total new orders and 23% said they decreased, giving a balance of +14%;
  • 34% of firms reported an increase in domestic orders and 26% said they decreased, giving a balance of +8%.

However, 23% of firms said export orders increased and 30% said export orders fell, giving a balance of -7%.

Optimism continued to rise for the third consecutive quarter: 34% of respondents said they were more optimistic than three months ago and 13% said they were less optimistic giving a balance of +21%.

In addition, workforce numbers grew by +4% and overall headcount is also expected to increase again in the coming quarter by +6%.

Stephen Gifford, CBI director of economics, said: "As the recovery takes hold, the investment cycle is starting to turn. It's encouraging to see smaller manufacturers planning to boost investment, particularly in their plant, machinery and buildings."

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