Product category:
Manufacturing industry news
News Release from: PKF Accountants & Business Advisers | Subject: PKF SME Index
Edited by the Manufacturingtalk Editorial
Team on 27 January 2006
UK SMEs' business orders rose in
December
Christmas period proved to be the best quarter of the year for UK SMEs, with increased output and levels of new business orders at their highest for a year, says a quarterly survey of 800 firms.
Christmas period proved to be the best quarter of the year for UK SMEs, with increased output and levels of new business orders at their highest for a year, says a quarterly survey of 800 firms Christmas brought some cheer for the UK SME manufacturing sector with increased output and levels of new business orders at their highest for a year, according to the 'PKF SME Index', a quarterly survey of 800 SMEs operating in the manufacturing, construction and service sectors
This article was originally published on Manufacturingtalk on 19 Oct 2005 at 8.00am (UK)
Related stories
UK SMEs retreat from brink of recession
With manufacturing output recovering, employment falling for fourth quarter running and levels of outstanding business continuing to fall, UK SMEs back away from recession.
UK SME manufacturing output falling
UK SME manufacturing output fell for the first quarter since the end of 2001 and levels of new business are the lowest since March 2002, says quarterly survey.
Although the sector's output growth is below the average for all three sectors (54.1) at 52.9 (where marks above 50 indicate expansion and marks below 50 indicate contraction), it does indicate that the sector is not on the brink of recession as it was at the end of Q2 when output was contracting (48.2).
The level of new business orders also rose from a flat 50.4 in Q3 to 52.3 in Q4.
Again, this is below the average survey performance of 53.9 but it indicates a much healthier order book situation than in Q2 when the sector recorded a negative 49.1.
Further reading
Founder gains ownership of plastics moulder
Mike McDonough, founder of Sertec Plastics, has bought the UK company out of the Sertec Group with financial backing from Lloyds TSB and accountants and business advisers PKF.
Automotive parts maker acquired in MBO
With guidance from PKF, a UK automotive components manufacturer making valve spring retainers and plugs was successfully acquired in an MBO and has won a major order from the USA.
UK incentives exist to improve energy efficiency
Engineering and manufacturing businesses are not doing enough to control their consumption of energy and are largely ignorant of incentives for becoming energy efficient.
Respondents cited seasonality as the main reason for the uplift but others benefited from orders from the Ministry of Defence, a better than expected Christmas for retailers, and customers ordering early to beat the new year price increases.
However, while many manufacturers enjoyed a hectic Christmas rush of orders, 'seasonal' translates as 'slowdown' for others with fewer orders and a quieter period leading up the Christmas shutdown.
Employment levels within the sector have now contracted for the fourth quarter running (48.0).
Some manufacturers are hiring staff on short term contracts to cope with increased orders but many are still are adopting a 'natural wastage' approach and making redundancies to cut operating costs.
Input costs rose steeply again during the quarter to 60.6, up from 56.4 in Q3.
All energy-related costs are up again as well as those for zinc, copper, aluminium, paper and plastics.
As one respondent glumly noted: 'the whole country seems to be increasing prices'.
The gap between manufacturers' input costs and their output prices also widened during the quarter - up from 5.6 in Q3 to 7.8 in Q4.
Respondents are passing on inflationary price increases for raw materials to their customers but they are also having to pay higher staff rates and absorb fuel costs which cannot be passed on.
Stuart Barnsdall, partner specialising in growing businesses at PKF, commenting on the SME Index findings, said: "There are definitely some pockets of encouraging news for the SME manufacturing sector from this quarter's results.
Many respondents were flat out at the end of the year with full 2006 order books to look forward to.
Anecdotal evidence also suggests that there is a strong focus on improving efficiency and productivity to maintain competitiveness and attract new customers." * Copies of the PKF SME Index, quarterly performance survey of small and medium sized enterprises are available free.
• PKF Accountants & Business Advisers: contact details and other news
• Email this article to a colleague
• Register for the free Manufacturingtalk email newsletter
• Manufacturingtalk Home Page
Search the Pro-Talk network of sites
