Over half of manufacturing businesses (55%) are feeling positive about their business prospects in 2012 according to the Outlook 2012 study by Baker Tilly. Of those surveyed, only one in five (22%) had a negative outlook for the year ahead. These figures were supported with three quarters of businesses (76%) expecting their profit levels to increase or stay the same.
Although the general outlook for manufacturing businesses is positive, two in five (41%) business leaders predict the recovery to be slow with low growth. Just over a quarter of businesses (26%) believe that the economy will slip back into another recession with 27% predicting economic stagnation.
Ali Aneizi, Baker Tilly comments:
"As recent growth figures have shown, despite the UK economy teetering on the edge of a double dip recession, the manufacturing sector appears to be fighting against the tide and showing signs of growth. The results of the Outlook 2012 survey show that there is a high level of optimism amongst manufacturing firms for the year ahead."
When asked what single initiative from the Government would help improve business conditions, many respondents said a reduction in VAT, tax and red tape. Business leaders identified a downturn in overall demand and an increase in global inflation as potential threats for the coming year.
With a view to tackling the continuing economic downturn, just under half of businesses (45%) said that they were aiming to improve their processes, while two in five (39%) are looking to focus on direct cost cutting. In addition to implementing measures to help strengthen their position, almost half (47%) of businesses were looking expecting to raise additional finance over the coming year, with traditional bank lending expected to be the main source.
Aneizi continues: "It seems that the general sentiment amongst manufacturing firms is fairly positive. Although there are some measures that the Government can take in helping businesses to continue the recovery, the basis of performance for the sector is going to be heavily driven by consumer confidence and the global demand for UK manufactured goods."