Manufacturers boost output despite cost pressures

Smaller manufacturers increased their output in the three months to January, boosted by demand for UK goods.


Smaller manufacturers increased their output in the three months to January, boosted by demand for UK goods.

Smaller manufacturers increased their output in the three months to January, boosted by demand for UK goods.

Some 30 per cent of manufacturers report an increase in output by volume, while 17 per cent saw a decline, resulting in a balance of +13 per cent, up on +9 per cent in the previous quarter.

The CBI’s SME Trends Survey reveals that 28 per cent of small manufacturing companies saw a rise in volumes of domestic orders while 20 per cent suffered a fall, giving a balance of +8 per cent, the fastest increase since January 1997.

According to the survey of 366 manufacturers, cost pressures are continuing to squeeze profit margins, with a balance of +28 per cent of respondents reporting rising costs. Lucy Armstrong, chairman of the CBI’s SME Council, warns that manufacturers are being forced to pass on price increases to their customers.

But the survey also reveals that a balance of +10 per cent of small manufacturing companies took on more employees in the quarter, the fastest rate of growth since April 1995.

‘With domestic orders steadily improving and production rising, firms are increasing their headcount to keep up with demand,’ explains Armstrong.

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