CBI trends survey reveals decrease in UK SME output

Output has fallen among the UK’s small and medium-sized manufacturers and sentiment has deteriorated, according to the CBI.

In the CBI’s latest SME Trends Survey, which had 359 respondents, 23 per cent of manufacturers reported that output volumes had increased in the three months to July while 28 per cent said they had fallen.

The resulting balance of -5 per cent is the first fall since October 2009 (-14 per cent). However, companies expect output to be broadly flat in the coming quarter (+2 per cent).

Export orders fell slightly in the quarter to July (-4 per cent), while domestic orders were flat (+2 per cent). Both export and domestic orders are expected to fall over the coming three months (balances of -12 per cent and -5 per cent respectively).

Alongside the deterioration in activity, optimism about the general business situation fell back (-13 per cent), following a sharp improvement in the previous quarter. Investment intentions for the next 12 months also softened.

Respondents plan to lower capital expenditure in the year ahead compared with the past 12 months, with investment intentions for plant and machinery (-13 per cent) at their weakest in three years (-19 per cent in July 2009), although only slightly below their long-run average (-9 per cent).