Business & finance
Business & finance
BSI scores – June 2020 to May 2023
A CAUTIOUS RETURN TO CONFIDENCE for Manufacturing and Engineering SMEs
Research date BSI score UK
BSI score Manufacturing and Engineering
May 2023 December 2022 July 2022 February 2022 September 2021 April 2021 November 2020 June 2020
20
26.5
11.5 14.25
12.5
18.25
27.9
38 40.5 37
31.75
28.63
14.5
25
20.25
12.25
Appetite for investment Overall, the appetite to invest remains strong, as it was at the end of 2022, with 83% (UK: 75%) of Manufacturing and Engineering firms looking to seek funding for investment in the next 12 months.
By Guest Writer Anton Nebbe, Head of PR and Communications, Close Brothers Asset Finance
Q: Does your business plan to seek funding for business investment in the next 12 months?
A few years ago, I developed – along with a statistician at the Manufacturing and Technologies Association – a confidence tracker for small to medium sized businesses, which we called the Business Sentiment Index. The score we calculate is based on four key indices (see bottom of this piece), and measures how business owners are feeling at a certain point of time.
UK
Manufacturing and Engineering
May 2023
Yes 75% No 25% Yes 76% No 24%
Yes 83%
No 17%
December 2022
Yes 83%
No 17%
The score for Manufacturing and Engineering typically tracks higher than the UK as a whole, and generally outperforms other sectors, including Construction and Transport, for example. What we found the last time we conducted our research in May 2023 is that business confidence across all sectors – including Manufacturing & Engineering - rose for the first time since September 2021, following three consecutive falls and a low at the end of 2022. These were caused, in the main, by rising inflation, energy cost increases and higher interest rates. Despite the headwinds still being faced
by small and medium-sized firms and inflation stubbornly remaining in double digits, wholesale energy prices have fallen from their summer 2022 peaks, and there appears to be more certainty about where interest rates rises are headed, all of which is helping firms plan with more assurance. This change in confidence is better understood when looking more closely at Manufacturing and Engineering businesses’ priorities, which are managing costs (29%; UK: 26%) and achieving growth (22%; UK: 28%) well ahead of issues like paying down debts (10%; UK: 9%) and business consolidation (9%; UK: 9%).
Missed opportunities The number of Manufacturing and Engineering companies that have missed business opportunities because of a lack of available funding stands at 47% (UK: 45%) in May 2023. While this is an improvement, these are historically ‘high’ figures – for example, in May 2022, 37% of UK respondents answered ‘yes’ to the question ‘have you missed a business opportunity in the last 12 months, due to lack of available finance?’.
It would appear businesses are concerned about impacting their cashflow by dipping into their reserves or taking out a standard loan and adding to their debt burden. Q: Have you missed a business opportunity in the last 12 months, due to lack of available finance?
UK
Manufacturing and Engineering
Yes 45% No 55%
Yes 47% No 53%
Machinery & Manufacturing 27
Machinery & Manufacturing 26
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