Business Optimism On The Up

Optimism amongst small and medium sized companies is on the rise despite concerns about the strength of the economic recovery and the EU referendum.
According to the latest CBI Quarterly SME trends survey, which looks at 441 firms, 23% of small & medium sized enterprise manufacturers said they were more optimistic, while 18% said they were less optimistic in the three months to April.
Just over a quarter, 26%, said their volume of output was up with 25% declaring it was down.
Total new orders and new domestic orders edged up slightly over the period while for 24% export orders fell.
However, optimism about demand for exports over the year ahead rose for the second quarter, with SMEs expressing greater confidence than larger firms.
Output was flat among small and medium-sized manufacturers, in line with the performance of the rest of the manufacturing sector. Expectations for the quarter ahead remained strong.
The CBI found that against this backdrop, investment intentions also strengthened with replacement and efficiency on plant and machinery among the primary drivers of investment.
Almost a third of SME manufacturers, 31%, said they were employing more people than three months ago but with 26% upping spending on training and retraining this reveals that concerns about skill shortages have picked up again.
“Higher spending on training is often a sign that skills shortages are biting again. This further underlines the need for business and government to work together in the coming months and make sure we get the design of the apprenticeship levy right, so it can deliver the quality skills training that firms need,” said Rain Newton-Smith, CBI director for Economics. “While the depreciation of the Pound since mid-2015 will be welcomed by exporters, the Government could and should do more to help by establishing an exports commission that can look at the challenges and opportunities for exporters more closely.”