SMEs in England are set to embark on a major investment drive in order to meet expected new demand, according to a new survey.
The latest Manufacturing Advisory Service (MAS) Barometer’s special focus found that 86 per cent of respondents were planning to invest in capital equipment over the next twelve months, with companies looking to spend an average of £121,000.
With over 80,000 firms making up the English SME manufacturing community, this could equate to hundreds of millions of fresh industry investment between now and 2015.
Two thirds of the firms questioned are looking to purchase new plant and machinery, just over half are focused on upgrading IT/communications infrastructure, and nearly a third on improving premises.
The main reasons driving these investment plans were boosting efficiency and quality (31 per cent), followed by developing new products/processes (30 per cent) and extending existing capacity (22 per cent).
Fewer than one in five companies (19 per cent) said they planned to approach banks to fund capital equipment purchases in the next year, with manufacturers instead choosing to secure money via grants (27 per cent) and the Regional Growth Fund (21 per cent).
A record 864 SME manufacturers responded to the latest MAS Barometer, which provides an overview of economic conditions and issues faced by the sector during October to December 2013.
A total of 62 per cent of companies reported an increase in sales over the last six months (a 6 per cent rise on the last report), whilst over three quarters of businesses (76 per cent) expect to boost sales between now and June 2014.
In a statement, Steven Barr, Head of MAS, said: ’There is a definite feel good factor around English manufacturing at the moment and these latest figures reinforce positive reports from the Society of Motor Manufacturers and Traders (SMMT) together with encouraging Purchasing Managers’ Index (PMI) data.’
For the first time since the national Barometer launched in 2012, more than half (53 per cent) of English manufacturers are expecting to take staff on over the next six months, marking a 14 per cent rise on the previous report.