Manufacturing sector loses confidence

Business optimism among manufacturers has plummeted over the last six months, according to a survey by UK private equity house Gresham.

Research has revealed confidence levels among directors of mid-sized manufacturing companies in Britain has dropped considerably. Just over 50% of respondents feel optimistic about growth prospects now compared with 70% in January.

Mike Henebery, managing director at Gresham, said: “The downturn in manufacturing optimism is perhaps unsurprising in the aftermath of the collapse of MG Rover. At the same time, it is notable that the percentage of respondents saying they are very optimistic about prospects has risen from 12% in January 2005 to 17% now – close to the 19% recorded in summer 2004, so all is not gloomy.”

Other findings from the survey reveal that 47% of mid-sized companies in the UK fear road-charging will have a damaging effect on their business with levels of concern particularly high in the north (54%) and in Wales (67%). Manufacturing firms were more concerned about road pricing than those in the services sector, with 55% fearing the effects of road charging against 38% in the services sector.

And sales and profit growth has been slipping over the first six months of the year: 58% of mid market firms report an increase in turnover, compared with 65% in January; while 50% have seen profits rise, down from 55% six months ago.