SME MANUFACTURERS REMAIN BOUYANT IN QUARTER TWO

SME manufacturers had a particularly buoyant quarter with business activity at its sharpest in the series history, according to the PKF SME Index, a survey of 1,000 SMEs operating in the manufacturing, construction and service sectors.

Business activity for SME manufacturers jumped from 56.2 in Q1 to 58.2 in Q2 (marks above 50 indicate expansion and below 50 indicate contraction). New business / orders also increased considerably and the figure was the strongest seen for seven-and-a-half years – the figure in Q2 was 56.2, in Q1 it was 54.5. Survey respondents put the growth down to an upturn in demand, only some of which is seasonal.

The strong new order growth meant a solid expansion in the manufacturing workforce in Q2 – the figure was 52.0.

Input price inflation continued to creep up in the quarter. The figure was 63.7, up on the last quarter's figure of 62.2. In line with this increase, prices at the factory gate were also on the rise again – although a smaller rise than the previous quarter – as manufacturers attempt to pass on their costs to consumers.

PKF partner for growing business, Stuart Barnsdall, commenting on this quarter's survey results said: "SME manufacturers have had a very strong quarter and should be commended on the increases in business activity and new orders that have been achieved.

"The rising costs to both manufacturers – as a result of hikes in the prices of raw materials – and then on to the consumer are slightly worrying in the present economic climate, but with the interest rate still on the increase, it would be expected that these will be tamed in the coming months."

SUMMARY OF DATA FOR SME MANUFACTURERS

	2007 Quarter 2	2007 Quarter 1	2006 Quarter 4	2006 Quarter 3
Output	58.2	56.2	55.4	55.2
New Orders	56.2	54.5	55.3	54.5
Employment	52.0	52.5	52.5	52.0
Input Costs	63.7	62.2	62.8	69.0
Output Prices	57.3	57.9	55.4	55.0

SME MANUFACTURERS REMAIN BOUYANT IN QUARTER TWO

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