The Voice of SME's in Engineering

BANK OF ENGLAND SURVEY RESULTS - MARCH 2018

ENGINEERING INDUSTRIES ASSOCIATION – the voice of SMEs in Engineering

I attended a Bank of England meeting on 6 March 2018 and presented the results of our recent survey among SMEs in Engineering. In comparison with the last survey of 28 September 2017 the following trends are apparent:

  • Business Confidence has not improved and is approximately the same as last time
  • Overall Growth approximately same as last time
  • UK Demand is the same as last time
  • Export demand continues to be strong
  • The number of people employed is approximately the same
  • The average increase in pay per employee is still mainly in the 0-2% area
  • There are still skill shortages
  • 52% of survey will increase prices compared with 50% last time
  • Investment intentions are approximately the same as last time
  • Living Wage is affecting business costs in 26% of the survey compared with 15% last time

The factors influencing the results include the following:

  • The significant decline in £sterling is still helping exports. At our last meeting I mentioned problems with DIT on the delays on agreeing the programme for overseas shows under the TAP programme. The programme has now been agreed for this year but the delay has caused problems.
  • The main concern amongst our members is the uncertainty of Brexit. This is affecting their future planning and investment. Many companies are fearful of the effect on their business and their ability to trade in Europe.
  • SMEs are trying to live within their own cash flows rather than borrow from the big 5 Banks. They are reluctant to give personal guarantees. This and Brexit are restricting investment intentions. The alternative market is still expanding.

Kind regards
Sir Ronald Halstead
EIA President