Martin Walder, EAMA chairman, says: “After months of erratic improvements followed by disappointing retreats it’s the size of the improvements that gives us cause to hope that something more permanent is going to come of these very promising June returns. 

“With a quarter of all firms reporting that they are finding it easier to access working capital and over a fifth (22%) saying the same about investment finance these improvements could help firms to take up the plant, skills and R&D challenges that have generally been seen as areas where small and medium sized UK manufacturers need to invest to be internationally competitive.

“Up until this month UK and export enquiries had held up very well since the end of Q3 last year.  UK prospects remained strong in June but not so exports.  The same applied to order numbers.  In both cases the export balances have narrowed particularly in areas where the strength of sterling is a major factor and there’s plenty of foreign competition.

“In summary, the second quarter has built on improvements in the first three months for UK business, and while the three month average on export enquiries remained as strong in the second period as in the first, there are some signs of a softening on export orders (quarterly average balance of +8 in Q2 compared with +15 in Q1).

“Confidence across the sector however remains bullish with good job opportunities and companies developing and committing to new projects, plant, training and IT infrastructure.  

“Over the last few years we’ve seen a fairly well established pattern on access to finance in the Monitor where improvements prove to be very short lived and positive balances hardly ever last more than a month.  And of course the upcoming quarter is generally a period when we see some softer numbers, particularly round the August returns.  

“Our expectations are therefore modest; that companies should continue to record improvements on access, maybe at lower levels than in June and that if a trend is developing we’ll see it emerge in September and through the winter quarter.”