Confidence high amongst small manufacturers

News Article - 24 January 2011
Category: Industry

New research by the Federation of Small Businesses (FSB) reveals that manufacturers are amongst the most confident SMEs in terms of their prospects for success in 2011.

The Voice of Small Business Index surveyed more than 1500 businesses to find that confidence amongst manufacturing SMEs increased by 15.8 per cent on the previous quarter in Q4 2010. This was the third biggest rise, beaten only by SMEs in the education and financial sectors.

Confidence across manufacturing sectors is consistent with Purchasing Managers' Index figures - released by the Official for National Statistics (ONS) and the Chartered Institute of Purchasing and Supply (CIPS) - which showed significant boosts to output and new orders in December.

Yet confidence across all sectors fell by 13.2 per cent, with the least confidence displayed in sectors directly reliant on consumer spending, such as transport and rail and social based industries.

Despite improvements in the job market, small and medium sized enterprises expect slightly negative employment prospects in 2011. Of the firms surveyed, 77.7 per cent will keep employment levels the same this year, whilst 12.4 per cent expect redundancies will be necessary at some point. This is up from 10.4 per cent in Q3 2010.

Financial pressures expected this year will ensure growth prospects remain uncertain in 2011. John Walker, national chairman of the FBS: "A number of pressures on small businesses are beginning to come to a head, such as the increase in VAT and fuel duty, placing more strain on cashflow. This combined with the severe weather at the end of 2010 has meant that small firms are not as confident about their prospects in 2011."

In light of these risks, complacency must be avoided by manufacturing SMEs, who must remain proactive in protecting profit margins. Access manufacturing and production software is an integrated solution that provides a range of benefits to manufacturers. The Project and Job Costing module, for example, allows actual costs to be linked to up to 10 pre-set budgets at any time, helping to make sure projects do not run over and hit the bottom line.

For more information, please call Access on 0845 345 3300.

Article keywords: Federation of Small Businesses, FSB, manufacturers, Voice of Small Business Index, business confidence, Purchasing Managers’ Index, Official for National Statistics, ONS, Chartered Institute of Purchasing and Supply, CIPS, small and medium sized enterprises, VAT rate rise, fuel duty, Access manufacturing and production software, Project and Job Costing module

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