LAUNCHPAD: 'Made in Britain' is back - but manufacturers are ditching banks

Good news for a more balanced economy: 86% of small manufacturers are planning to invest in equipment, although they aren't expecting banks to provide the funds.

by Rachel Savage
Last Updated: 25 Feb 2014

While the economic recovery is indisputably good news, so far it's been a bit consumer spending and debt-fuelled growth-y. So news that a majority of small manufacturers are planning to plough cash into their business could signal economic expansion is finally becoming the more balanced, sustainable kind.

A survey by the government-funded Manufacturing Advisory Service has found 86% of small manufacturers (employing between 2 and 249 people) are planning to invest an average of £121,000 in machinery, IT and buildings in the next 12 months, a hefty leap from the mere half planning to in the previous quarter.

Small manufacturers are also doing better and expecting that to continue - 62% reported a rise in sales in the preceding six months, up 6% from the previous report. 76% think their sales will rise in the first half of this year, according to the survey of 864 businesses over October to December 2013.

One figure worth noting was the 19% of respondents planning to fund investment with bank loans, compared to almost half looking to grants and the Regional Growth Fund (perhaps unsurprising from a government-backed survey...). That's a pretty small figure, suggesting banks' reluctance to lend over the past few years means businesses have found new sources of funding. Roll on the borrowing revolution....

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