SMEs predict export-led growth in Q3 2009

Medium-sized manufacturing firms in the UK are expecting growth to return in the third quarter of 2009, in part stimulated by an improvement in export orders. Other small businesses in the sector are also seeing the rate of decline in orders and output slowing.

Just over half (51%) of SME manufacturing companies saw new orders fall in the three months to end July, while 17% saw a rise, according to the latest Confederation of British industries (CBI) SME Trends Survey.

This is a significant improvement on results from the first quarter of 2009.

Despite a slowing in the decline of confidence, orders and output, CBI figures still show the SME sector suffering.

Volumes of domestic orders remained weak (a balance of -38%) and are predicted to shrink further during the next quarter.

Nevertheless, it’s encouraging to see attitudes shifting, optimism returning, little by little and a real upturn for some medium-sized businesses, especially in terms of exports.

Russel Griggs, chair of the CBI SME Council, said:

So far, the relative weakness of Sterling has not provided firms with much of an export boost. It is therefore encouraging that medium-sized companies are hopeful overseas orders will pick up in the next quarter, helping raise total orders and output.

Green shoots? Perhaps.

[Photo credit: photohome_uk licenced from Flickr]