SMALL and medium-sized manufacturers saw the volume of orders at home and abroad grow at the fastest rate in 16 years, leading to another solid rise in output, a report by employers’ group the CBI said today.
But the latest quarterly SME (small, medium-sized enterprises) trend survey warned that smaller firms are being squeezed by intense cost pressures.
The survey revealed that, of the 414 respondents, 39% reported a rise in the volume of domestic orders in the three months to April, and 23% a fall, giving a balance of +16%.
For export orders, 37% said volumes increased and 14% said they declined, giving a balance of +23%.
Strong demand at home and abroad, coupled with stock rebuilding, helped push up output further.
A balance of +18% of firms said production rose, compared with +13% in the previous quarter.
With demand and output rising, a balance of +16% of firms increased their headcount, the fastest rate since January 1995 (+17%).
But alongside strong growth, production costs have increased rapidly, weighing on profit margins. A balance of +53% of firms said average unit costs rose, the highest since October 2008 (+53%) with the rate of growth accelerating from already strong increases over the past year. That led to sharp rises in average domestic prices (+26%) and export prices (+31%), both in line with expectations. Domestic prices rose at the fastest rate since April 1995 (+32%), and export prices at the sharpest rate since the survey began, in October, 1988.
