Despite predictions of a downturn in the SME manufacturing industry, UK businesses in this sector have been proving otherwise with increased sales and business confidence.

According to the results of the latest Manufacturing Barometer – a quarterly survey into the state of the British manufacturing industry – 59% of small and medium businesses reported an increased turnover in the past six months. On top of this, 70% are expecting to see further increases over the next quarter and 50% are looking to recruit.

Signalling a positive move towards advanced manufacturing, more than 54% of SMEs are planning to invest in new technology. This is the highest figure recorded in the six years that this survey has been conducted.

Steven Barr, Head of Manufacturing at the Business Growth Service, said: “Im pleased to say that SME manufacturers are feeling more optimistic. Turnover for the last period has bounced back strongly and the outlook for future sales appears positive, with automotive and construction strong and new opportunities in offshore wind and nuclear opening up previously untapped markets.

“Record investment plans in technology should be welcomed. This shows companies are recognising that they need to spend in order to compete globally, offering unique processes and technologies that establish themselves on the added value chain.”

Despite the healthy statistics, Mr Barr warned that there could still be trouble ahead.

He said:  “Any slowdown by the bigger manufacturers will take a while to cascade down the supply chain. We have to be mindful that there might be a delayed reaction to the predicted slowdown.”

What are the main issues facing UK SME manufacturers?

Part of the survey was to question SME leaders on any issues hindering growth. Regulation, increased pressure to pay higher salaries and securing finance and investment were cited as the main burdens currently affecting small and medium manufacturers in the UK.

A skills gap was another issue highlighted, with 32% of manufacturing employers unable to find employees with the right skills.