Manufacturing bosses losing confidence in economic recovery
Optimism among Britain’s manufacturing entrepreneurs is falling as the economy continues to struggle – and many bosses are now scaling back their business plans in anticipation of falling demand.
These are the principal conclusions of the Confederation of British Industry’s (CBI’s) latest SME Trends Survey, based on responses from 411 small business owners.
While 18% of the manufacturing entrepreneurs claimed to be more optimistic about the economy than they were in May, 28% said they were less optimistic – creating the survey’s first negative balance for more than two years.
The CBI survey also revealed that Britain’s small manufacturers are generally planning to cut their spending on plant and machinery, due to widespread pessimism exacerbated by a spate of global economic problems.
Lucy Armstrong, chair of the CBI’s SME Council, said: “Orders and production have been strong for the UK’s smaller manufacturers this quarter, but growth is expected to stagnate in the next, and sentiment has fallen for the first time in two years. Confidence has also been affected by global economic and political uncertainty over issues such as the euro crisis and the US debt ceiling. “As a result, manufacturers are re-assessing their business plans. They do not expect to take on any more staff in the next three months and intend to invest less in the year ahead.”