First Rise in Exports for Nearly Two Years
Small manufacturing firms are starting to benefit from the weak pound, with export orders stabilising after seven consecutive quarters of decline, figures from the Confederation of British Industry (CBI) have revealed.
The CBI’s quarterly SME Trends Survey of 418 firms found that 27% saw their orders increase between November 2009 and January 2010, while 25% saw their orders fall over the same period. The resulting balance of +2% is the strongest figure since January 2008.
The CBI said exports were being helped by the “relative weakness” of the pound, which has recently dropped slightly against the US dollar.
The Manufacturing Technologies Association’s (MTA) director general, Graham Dewhurst, said the CBI figures were welcome news.
“The weaker pound is having a positive effect on UK exports as the global economy recovers,” he said. “Increased interest in buying British goods abroad is also helping to stimulate demand.”
“The latest export figures for machine tools for the first three quarters of 2009 show a 72% increase in deliveries to China and a 5% increase to India,” said Dewhurst.
However, the CBI’s SME council chairman, Russel Griggs, said that while the figures were encouraging, it would take some time for small firms to fully recover.
“Smaller manufacturers have been pinning their hopes on the relative weakness of sterling to boost overseas orders and offset weak demand at home.”
“But, with the economy only just edging out of recession, conditions will still feel pretty challenging for smaller firms. Domestic orders are likely to remain depressed, and firms are expecting output to fall in the next three months.”