The research is based on responses by 70 CEOs, MDs and owners of SME manufacturing businesses (and also 375 businesses from other sectors) conducted by Vistage, a leadership organisation for business owners. 

Key findings include:

•  About two-thirds of manufacturing businesses aim to expand their workforce in 2015 (with 22% polled expecting to recruit this quarter and 44% intending to recruit steadily throughout 2015).  

•  The expansion of the workforce at most manufacturers is being driven by strong expectations that the better economic times will translate into sales – with over three quarters expecting an increase in sales revenue over 2015 (18% expect sales to remain about the same, 6% expect them to fall).

•  Almost two-thirds (62%) expect their company’s profitability will increase over the next year, with only 9% expecting lower profit.  

•  Over half expect their total fixed (capital) investment expenditures will rise over the next year, while just over one-third (38%) predict their investment levels will stay constant and only 9% expect less – similar to the research in Q4). 

•  Owners of British mittelstand manufacturing businesses continue to be optimistic about the forthcoming year. Over half expect the economy to improve, whereas only 9% expect it will get worse – a drop of a quarter compared to high levels of confidence that appeared in Vistage’s previous research last quarter.  

•  They felt that 2015 was on the whole going to be a similar year for the UK economy, with almost two-thirds expecting similar economic conditions over the next 12 months (22% expecting conditions to improve and 10% expecting things to remain the same).

 

Steve Gilroy, CEO of Vistage, said: “The manufacturing industry is optimistic about what lies ahead in 2015. Capitalising on the strong economy, manufacturing businesses are investing strongly in capital assets and creating more jobs, while expecting strong sales and profit growth throughout the year. 

“Regardless of May’s General Election, UK construction business owners are generally expecting a strong performance this year, and not worrying about the election’s uncertainty on impacting output.

“This is good news for the whole economy. British manufacturing has shown over the past 18 months to be the backbone of the UK’s growth and one of the keys to its prosperity, a skilled workforce and a balanced economy.

“While entrepreneurial start-ups are great for the future, most remain small and create few jobs.  By contrast, the manufacturing sector is crucial to the growth of the economy for job-creation and big investment when the conditions are right… as they are now.”