Close Brothers Asset Finance has been surveying firms in the manufacturing and engineering sector for many years on a wide range of topics. The topics vary from subject matter as diverse as their economic outlook to their thoughts on a four-day working week. In this article, we cover the key outcomes from the most recent research.
Business optimism
Nearly 80% of respondents are more optimistic about their prospects than they were a year ago – only 5% are pessimistic. During the pandemic, 56% of firms either grew strongly (31%) or modestly (25%). There were a further 24% that traded at normal levels. Brexit and cashflow have been two of the biggest concerns for businesses.
Appetite for investment
Overall, firms’ appetite to invest was very solid. Over three quarters of companies polled indicated that they plan to seek funding for business investment in the next 12 months. Of those businesses, 36% said they would be looking to invest ‘heavily’.
Missed opportunities
Nearly half of companies surveyed have missed a business opportunity because of a lack of available finance with many businesses now requiring additional finance to enable them to invest in growth and to continue their path to recovery.
Economic outlook
Positivity about the economic outlook has remained steady with 52% of firms expecting the economy to grow while a further third anticipate a ‘slow path to prosperity’. Only 10% of manufacturers are concerned the economy could decline again.
Predicted business performance
Business owners are largely positive about their predicted business performance. This is identified with 44% of companies expecting to expand; 46% anticipate business to ‘stay the same’ and just 9% foresee a contraction to their business.
Brexit
Brexit is having a major impact for 70% of firms in the sector, with it impacting both the ability to buy from, and sell to, European customers and suppliers.
For three in five SMEs surveyed, costs are now higher because of Brexit. However, for 19% the costs are lower. It has also increased the time it takes to receive goods from Europe for 65% of companies. For 61% of manufacturers, it is taking longer for their goods to reach their European customers. Half of respondents say Brexit has also impacted their ability to recruit the staff they need.
Diversity
Two thirds of firms surveyed believe that having a diverse workforce in terms of gender, ethnicity, age, sexual orientation and other factors is beneficial to the financial performance of a business. In contrast, 28% of respondents disagree with this statement whilst another 7% of companies remain unsure.
More than 6 in 10 manufacturers are working to make the workforce more diverse, with the main reason given ‘because it’s the right thing to do’ (58%), along with ‘because it reflects our customers’ (29%).
www.closeassetfinance.co.uk
