2007 concerns manufacturing SMEs
Small businesses are nervy about what 2007 holds for them
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Monday, 12, Feb 2007 08:27
Britain's small and medium enterprises (SMEs) enjoyed a strong start to 2007 but are uncertain about prospects for the rest of the year, the Confederation of British Industry (CBI) says.
Publishing its quarterly SME trends survey today, the trade association found that strong overseas demand allowed the firms to drive output prices upwards, passing on high input costs.
Despite this the positive quarter expectations for the next three months remained muted, however, with business optimism scoring an unchanged negative balance of one per cent.
Employment prospects also remain bleak, with 11 per cent more firms expecting to make personnel cutbacks than step up recruitment levels.
"Medium-sized firms do seem to be enjoying more favourable overseas demand, but all firms are more concerned that prices will constrain exports, particularly with the stronger pound," Steve Sharratt, chairperson of the CBI's SME council, said.
Concern about the pound's robust performance on the currency exchanges was blamed by the wider manufacturing sector as a key factor responsible for the UK accumulating its largest ever annual balance of trade deficit. The Office for National Statistics revealed on Friday that this accumulated to £55.8 billion last year.
"2006 was a very mixed year for small and medium-sized businesses," Mr Sharratt added.
"The flat business sentiment, along with an expected slowdown in demand and job cuts, shows this volatility may continue."