The latest CBI Quarterly SME trends have shown that 25 per cent of the UK’s SMEs have increased business optimism and export prospects. The survey reported that the number of new orders increased slightly during the three months to October as well as a steady rise in output. Export orders remained the same during the quarter and this marked the first time that they’ve not fallen since the middle of 2014.
A robust growth in export orders is expected to increase during the next three months and it is expected to be the strongest since the data series began in October 1988.While export prospects remained optimistic, SME manufacturers have reported that average unit costs at home are rising and are expected to continue to increase over the next three months.
The survey also showed that investment intentions have improved following deterioration in the wake of the EU Referendum and planned spending on buildings has moved above its average. Firms are expected to keep their expenditure on plant and machinery unchanged, however concerns over labour shortages have arisen.
CBI, Chief Economist Rain Newton-Smith said “Smaller manufacturers are increasingly confident about their export prospects in the months ahead as they continue to reap benefits from the weaker Pound. But this is also leading to a rise in costs at home. While investment intentions have improved, uncertainty among businesses remains high, and so the Government must prioritise measures to ensure that firms keep investing ahead, like removing new plant and machinery spending from business rate calculations.”