SME manufacturers’ export optimism dropping according to latest CBI survey

Manufacture generic

Small and medium-sized manufacturers in the UK are less optimistic about the prospects of exports for the year ahead according to the latest figures.

The latest quarterly CBI Trends Survey of 296 SME manufacturers showed that output grew at a pace above the long-run average in the three months to January, representing a similar rate to the three months to October.

However, manufacturers expect only a slight rise in output over the coming quarter, and total orders are set to be flat.

The CBI said 31% of SME manufacturers reported an increase in total new orders, and 23% said they decreased, to give a balance of 8%.

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Meanwhile, business optimism dropped for the second quarter in a row in January, with export sentiment falling at the fastest pace in nearly a decade.

The industry body said 11% of firms reported they were more upbeat regarding their business situation, while 37% said were less optimistic, giving a balance of minus 26%.

Optimism over export prospects for the year ahead also fell to give a balance of minus 29%, the fastest deterioration since April 2009.

“Uncertainty in the domestic and global trading environment is clearly hitting manufacturing SMEs hard, with sentiment falling, concerns over political and economic conditions abroad spiking and investment plans still well down on the past year,” said CBI principal economist Alpesh Paleja.

“To give the UK’s SME manufacturers some much-needed certainty, it is crucial that politicians now work together to break the Brexit deadlock,” he added.

“Firms will welcome that the majority of MPs oppose a no deal outcome, but rejecting no deal doesn’t provide certainty. A deal is vital for the future health of SME manufacturers, giving them the confidence to invest, grow and compete on the global stage.”