SME Manufacturers Hiring At Record Rate

Survey By CBI Shows SME Manufacturers Taking On More Staff Than Ever


Steven Beahan, Partner | +44 (0)114 294 7868

SMEs in the manufacturing sector are taking on more staff than at any other point in the last quarter of a century, according to new research from the CBI.

In its latest SME Trends Survey, the business organisation revealed that employment numbers surged in the three months to July, increasing by the fastest rate since records began in October 1988.

More than a third of respondents reported an upturn in employment over the quarter, while fewer than one in ten said it had decreased, resulting in a balance of +24 per cent.

The CBI's poll painted a broadly positive picture of the UK's manufacturing landscape. SMEs said they had also seen a strong rise in domestic orders and output, representing the fourth consecutive quarter of growth for these key indicators. Furthermore, they are expecting to see robust growth over the next three months.

Some 36 per cent of small and medium manufacturers saw a rise in new orders, compared with 22 per cent that faced a downturn in activity, while 18 per cent noted an increase in export orders.

Another 31 per cent said output had climbed over the quarter, while only 16 per cent saw it drop. This equates to a balance of +15 per cent, with this figure expected to rise to +19 per cent in the next quarter.

Reacting to the figures, the CBI's deputy director general Katja Hall said smaller manufacturers are settling into a "regular growth pattern".

"Firms remain upbeat about their business situation and they are hiring at their fastest rate since 1988," she commented.

However, Ms Hall warned: "Export orders have underperformed this quarter, which may in part be because of the strength of sterling.

"We need the government to get behind our small and medium-sized manufacturers to help them to sell their products and services to new markets around the world, giving a sustainable boost to long-term growth."

Expert Opinion
This is yet another study which has indicated the growing confidence across the manufacturing sector, particularly smaller businesses operating in the industry. Taking on more staff allows SMEs to expand their operations, develop new ideas and general boost the resources they have available to cope with customer and client demand.

"While this is of course good news for growing businesses, it is important that they bear in mind the potential growing pains which could emerge as a result of taking on new staff.

"Small firms should seek legal advice on a range of key employment issues when increasing a workforce, from ensuring contracts are clear and comprehensive to guaranteeing that policies are in place so that workers understand their responsibilities."
Steven Beahan, Partner