Demand for SME goods improving, says CBI

Date: 6th May 2010

Small and medium-sized enterprises (SMEs) in the UK are seeing an improvement in demand for goods both at home and abroad, according to a new report.

Figures published by the Confederation of British Industry (CBI) revealed that 36 per cent of SMEs reported a rise in volume of total orders in the three months to April 2010, while 26 per cent reported a fall.

This gave a result of +10 per cent, which was "better than expected", said the CBI.

However, the report also showed that a number of business groups have warned that "intense" cost pressure and problems accessing credit mean the market still has challenges to overcome.

Russel Griggs, chairman of the CBI's SME council, said: "With demand expected to grow in the coming months, manufacturers are thinking about taking on extra staff over the next three months.

"However, firms are experiencing a sharp rise in raw material costs which is squeezing profit margins. But they do expect to recoup some of this by raising prices over the next quarter. It is also still a concern that access to credit remains a headache for some firms."