UK's Manufacturers Optimistic
As Manufacturing Week launches today, 1 March 2010, the largest survey of businesses in England and Northern Ireland can reveal that Manufacturers have the most positive outlook for the next year compared to other sectors.
With 37 per cent expecting the climate to improve and 41 per cent believing it will remain stable, this optimism has been created due to better exchange rates helping exporters and improved demand. Expectations of domestic orders have improved across all sectors, but the manufacturing sector in particular has benefited.
The survey of over 5300 businesses by Ipsos on behalf of the Regional Development Agency (RDA) Network and Invest Northern Ireland is the largest of its kind, asking businesses about their performance, opportunities and issues.
Businesses are more optimistic about their prospects than at any time in the last 18 monthssince June 2009, with 29 per cent expecting the business climate to improve in the next 12 months.
Whilst there are continued challenging conditions facing businesses in England and Northern Ireland, fewer businesses reported deteriorating performance in November 2009 compared to June 2009. This is a sign that a stronger operating environment and more favourable demand conditions are beginning to impact business positively. The survey provides strong evidence that market conditions are stabilising with 20 per cent of businesses reporting improvement in performance compared to 16 per cent in June 2009.
The recovery could be arriving just in time as research shows that businesses have been stretched to their limits by the recession, and there are concerns about the effects of any further downturn. Almost a third (31 per cent) feel that they are not well placed to weather another dip in economic conditions. Indeed, the number of firms at risk has grown since June 2009; where 26 per cent felt they were not well placed.
However, the positive impact of these tough market conditions is that over two thirds (68 per cent) of businesses have been motivated to pursue new markets and customers as a direct result of the economic crisis. These business practices will enable business to grow strongly as the recovery continues.
Demand for finance is increasing, although it is unclear whether the finance will be used to fund expansion or as a lifeline to allow businesses to continue trading. The RDA/Ipsos survey shows a fifth of firms will need to raise new sources or renegotiate existing finance or credit in the next twelve months.
Larger businesses are finding it easier than smaller businesses to access finance or credit. At the same time larger businesses, those with more than fifty employees are continuing to perform better than smaller businesses, highlighting the need to support companies of all sizes to maintain a more stable economy.
The survey shows that businesses that use Business Link are likely to perform better, with 35 per cent of businesses who said their performance improved over the last 12 months having used Business Link. Overall, 27 per cent of businesses are planning to use Business Link services over the next 12 months.
The good news is that cash is now starting to flow more strongly across the supply chain. The survey reveals that fewer firms are delaying payments to their suppliers and are receiving payments more quickly from customers. Speaking on behalf of all RDAs, Mick Laverty, Chief Executive at Advantage West Midlands, said: "I am delighted that this survey reinforces the feedback that RDAs are receiving from businesses throughout England - that companies, and manufacturers in particular, are seeing the first stages of recovery.
"The role of RDAs is to support businesses and provide the conditions in which they can grow. We have worked closely with businesses over the last decade, paying close attention to their needs and implementing bespoke support where we can.
"This has included support to help them with product and services innovation and to help them diversify their customers and suppliers. I am particularly heartened that the survey shows that businesses that access Business Link services are likely to perform better."
Ben Page, Chief Executive, Ipsos said: "Our research continues to show a growing optimism amongst businesses that economic conditions are finally getting better. Access to finance when it is needed will help to keep businesses afloat."
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Notes to editors
1. The National Business Survey is one of the largest and most statistically robust of its kind carried out in England and Northern Ireland with over 5,300 companies responding from all sectors of the economy. Respondents are senior business leaders within their organisation.
2. The survey is carried out twice a year and asks a variety of questions ranging from business optimism to orders and output, skills issues, cost pressures and environmental performance.
3. The survey uses a predominantly postal methodology with the option to complete the survey online. Data are weighted to represent the regional business profile by business size (number of employees).
4. Detailed data for each government region is available from the relevant Regional Development Agency.
5. Ben Page is available for interview. To request an interview with Ben, please contact the Ipsos press office on 020 7347 3452.
About Ipsos: Ipsos is one of the largest and best known research companies in the UK and a key part of the Ipsos Group, a leading global research company. With a direct presence in 60 countries our clients benefit from specialist knowledge drawn from our five global practices: public affairs research, advertising testing and tracking, media evaluation, marketing research and consultancy, customer satisfaction and loyalty.
For further information: Matthew Flanders - PR Manager, Ipsos T: +44 20 7347 3452 E: [email protected]
