Small businesses predict growth

8th May 2012 | 09:34

Small businesses predict growth

Small businesses expect increase in orders says CBI

The Confederation of British Industry's (CBI) latest quarterly small business Trends Survey, shows a rise in optimism from small businesses, and it's a significant milestone, as this is the first rise in a year, the small business owners also predict to see growth in their orders and production over the next quarter.

Of the businesses polled a balance of +22% said they were more optimistic regarding the business situation in the three months to April and over the past three months the volume of total new orders rose modestly (+8%), and is expected to see faster growth over the next three months (+27%), driven by upturns in both domestic (+22%) and export order (+23%) growth.

Output was broadly flat for the second quarter running (+1%), but, like orders, is expected to see a significant increase in the next three months (+19%).

Similarly, small businesses also expect to increase employment (+16%) in the next quarter, having held headcount steady in the three months to April (+1%).

With sentiment recovering, firms are raising their investment intentions. Respondents plan to raise capital expenditure in the year ahead compared to the past twelve months, with investment intentions for plant and machinery turning positive (+13%) for the first time in a year.

Lucy Armstrong, Chair of the CBI's SME Council, said:

"Small and medium-sized manufacturers are feeling more optimistic for the first time in a year, an encouraging development given the important role that they play in our economy." Adding, "Indeed, firms expect orders and output to rise strongly in the coming quarter and plan to invest more in the year ahead, pointing to growing momentum in manufacturing activity."

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