Half of manufacturing firms expect to invest in their business in the coming months, according to a new report.
The Manufacturing Advisory Service’s (MAS) quarterly Barometer. survey of 682 companies by showed a 12 per cent increase on the number planning to spend on new machinery and premises compared to a year ago.
Just over half (53 per cent) of the small to medium-sized enterprises (SMEs) polled reported an increase in sales in the first half of the year and 67 per cent are predicting future increases in sales turnover – highest recorded since survey began.
David Caddle of MAS said: "Manufacturers tend to be very cautious and traditionally would have needed significant confidence in the long-term future to relax the purse strings.
"Encouragingly, our latest barometer provides the clearest indication yet that companies are prepared to invest in new machinery and their premises in a bid to remain competitive and take advantage of significant opportunities both at home and abroad."
Business minister Michael Fallon said: "Business minister Michael Fallon said: "These findings are the latest indication that the economy is starting to head in the right direction, as we move from rescue to recovery.
"It is particularly encouraging to see that confidence is returning and manufacturers are becoming more optimistic about their future growth."
The survey’s regular quarterly special focus was aimed at finding out whether business growth could be linked to innovation, with 82 per cent of respondents reporting that new products introduced over the last two years had led to new sales.
More than half (55 per cent) reported an increase in both sales and profits and over a third (36 per cent) of respondents said new sales accounted for 25 per cent or more of their total turnover.
David picked up the story: “The results in this special focus indicates that there is a strong link between innovation and increases in both company growth and profitability.
“This is why being innovative has never been so important for manufacturers. We are helping to encourage innovation in SMEs through our New Product Development programme, which provides support in developing, validating and bringing new ideas to market.”