Business Optimism Among Manufacturers Plummets Over Last Six Months

New research has revealed that confidence levels among the directors of mid-sized manufacturing companies in Britain has dropped considerably. 52% of respondents feel optimistic about growth prospects now compared with 70% in January.

Optimism levels drop from 70% to 52% in the manufacturing sector.
47% of directors fear road-charging will damage business.
87% see pensions as the best retainers.

New research has revealed that confidence levels among the directors of mid-sized manufacturing companies in Britain has dropped considerably. 52% of respondents feel optimistic about growth prospects now compared with 70% in January.

The survey, published by Gresham, the regionally based UK private equity house in the Mid- market Monitor, found that over the service and manufacturing sectors as a whole, confidence levels are at 65% now compared with 76% in January.

However, overall confidence levels remain well above their low point of January 2003 when only 43% of firms felt optimistic about the future.

Mike Henebery, Managing Director at Gresham, commented: "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 key findings of the survey include:

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 as against 38% in the services sector.
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.
Pension funding is the most important benefit for employees according to 87% of respondents ahead of other "perks" such as car allowances or flexible working.