Lending Improves for Manufacturers
After praising the Chancellor for his efforts in the Autumn Statement, EEF, the manufacturers’s organisation, have reported an improvement in the financial outlook for UK manufacturing.
Looking specifically at the corporation tax decision, export support and infrastructure spending, EEF said that George Osborne "had his hands firmly on the levers of growth" but warned that efforts must be continuous and with a firm goal in mind.
Citing the Government’s goal of doubling the UK’s exports by 2020, Terry Scuoler, EEF’s Chief Executive Officer, urged the Government to use the same drive for investment and growth in his next Budget and Spending review in 2013.
Backing up the push for sustained progress, a major survey from EEF has revealed that there is an improvement in lending conditions for the manufacturing sector.
A number of key findings have come out of the EEF survey, most notably that, overall, SMEs have reported the availability of business finance has been at the best level in over a year.
The cost of borrowing was reported as edging down for some companies although for those with existing finance arrangements there were still some increases.
One fifth of UK manufacturers have said that they will be actively looking for external finance next year so that they can increase investment in their businesses.
The findings of the EEF report do show differences in attitude toward borrowing between the smaller companies and the mid to larger companies – 43% of those small businesses questioned said they had absolutely "no plans" to borrow in 2013.
Ms Lee Hopley, Chief Economist at EEF, said of the findings:
“We’ve seen a few quarters of modest improvement in lending which is encouraging. With companies, on balance, expecting their demand for external finance to increase next year, progress on increasing the flow of credit and getting the cost down has to be sustained and built upon going forward.”
“We are yet to see the details of the new Business Bank but, what it must do, is start to provide a long term solution to the underlying problem of a lack of competition in SME banking.”
The results were published in EEF’s quarterly Credit Conditions survey, which has been carried out since Q3 of 2007.