A survey from the Manufacturing Advisory Service (MAS) revealed 86% of small manufacturers want to invest in capital equipment over the next year, showing business investment is certainly on the increase.
Surveying over 850 companies, the government supported service showed manufacturers are looking to invest £121,000 on average to improve IT systems, premises, plant and machinery. Many are looking to expand businesses by spending thousands on new production lines in order to keep up with competitors and find a firm footing in the industry.
The Bank of England is predicting an increase in investment of 11.5% this year. In 2003, there was a fall of 3.25%. With overall confidence improving, investing in new systems and recruiting are the next steps for innovation and new business. According to the MAS barometer, 62% of companies reported a rise in sales in the last six months with 76% of small manufacturers expecting an increase over the next six months of 2014.
Head of MAS and Area Director, Steven Barr, said “There is a definite feel good factor around English manufacturing at the moment and these latest figures reinforce positive reports from the Society of Motor Manufacturers and Traders (SMMT) together with encouraging Purchasing Managers’ Index (PMI) data.”
“Investment is crucial if we going to take advantage of reshoring and predicted growth in markets such as offshore wind, renewables and carbon vehicles”.
Interestingly, only 19% of companies are planning to apply for funding through banks, with the majority of SMEs hoping for grants and funding from the Regional Growth Fund. This indicates there is becoming wider support available for small businesses, something which is reflected across the whole SME sector, as more and more alternative lenders, like crowdfunders and peer-to-peer lenders are coming onto the market.
Employment in the manufacturing industry is also improving year on year, with the latest figures showing more than half of companies are expecting to take on new staff over the next few months. One of the reasons for this could be companies looking to employ staff with different skill sets.
Steven said, “Our expert MAS Advisors are working with companies on their long-term strategies and skills is one of the biggest issues they are facing. We can help with planning recruitment policies and embedding skills, not to mention referring them to other relevant business support services.”