The Confederation of British Industry has released its Monthly Industrial Trends Survey and found that the UK’s manufacturing sector is continuing to bounce back with unexpected vigour.
In fact, with five months of growth in expectations, the numbers haven’t looked this encouraging since 1995. This is good news indeed. With businesses reporting swelling order books we can now expect greater investment to be required to drive this growth.
The business funding question has been much debated over the last few years and the anticipated upsurge in demand for finance will place an even greater emphasis on solving the nation’s corporate liquidity problems.
Put simply, if there wasn’t enough lending going on through the crisis, how will lenders meet the demands of an expanding economy?
As confidence builds and order books grow, businesses will need to have employees work longer hours, take on new staff, replace older equipment and purchase ever greater amounts of materials to meet demand. It might not happen overnight, but British business owners will bounce back and will expect the lenders to respond accordingly.
Like all recoveries however, this good feeling is not universal. The CBI’s survey reveals that a sizeable minority are still suffering falling demand and other pressures. These businesses also still require funding to get them through the difficult times as they see others thrive.
We are well placed to confirm the schizophrenic nature of this recovery, with many clients reporting good news while others are still battling through their difficulties incurred by what has been the longest and deepest slowdown in our economy since the Great Depression.p