ACCESS to finance in the manufacturing sector looks to be easing, according to a new survey today.

The data, from manufacturers’ organisation EEF, is a welcome improvement from last week’s revelation that lending to small and medium-sized firms was adrift of the Government’s ‘Project Merlin’ targets for the first quarter of 2011.

EEF’s credit conditions survey of 500 North West firms shows that finance availability appears to be starting to ease.

Just as many small firms reported an increase in the availability of new lines of borrowing over the past two months as reported a decrease. This compares with a balance of -11% in the previous quarter.

There was a similar improvement in the balances among mid-size companies. For existing credit facilities, the balance of companies reporting decreased availability dropped from 11% to 7% among manufacturers.

However, rising costs could remain a challenge. While fewer firms report rising rates on existing facilities, a balance of 22% of companies reported an increase in the overall cost of credit in the past two months, little changed from the previous quarter. And, on new lines of borrowing, a balance of 28% of companies reported an increase in the overall cost.

David Ost, EEF regional director, said: “Ensuring companies have access to the finance needed to invest and grow is critical for the recovery. We need to see a sustained improvement before concluding that actions taken by banks and Government are bearing fruit.”