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UK Manufacturing confident, but challenges ahead


Evidence is mounting to suggest that the UK Manufacturing Industry is growing in confidence.

A CBI (Confederation of British Industry) survey in April showed 36% of SME manufacturers are now ‘optimistic’ about their current situation, the highest recorded since 1988.
The BDO Optimism index for the sector, which predicts 6 month growth expectations, in June registered a score of 119.5, well above the 100 point baseline. These figures echo other reports indicating the economy is rebalancing away from household consumption and towards business investment, manufacturing and trade. This was further substantiated in the Engineering and Manufacturing Employers organisation’s (EEF) pay survey results released in late August, which found that pay rose by 2.6% over the past year while wages have been stagnant or falling in other industries.
The CBI survey also found higher output and export orders, as well as rising employment and expectations indicating that the manufacturing sector has new-found momentum. This is translating into growing pressure from a shrinking pool of skilled workers, potential pressure on input costs, and capacity coming under review, and renewed interest in investment

Financing the Manufacturing Industry

With the need to fund investment in plant & equipment and working capital, larger manufacturers have been financing their suppliers and customers. JCB, the world’s third largest maker by volume of construction equipment, has also had demand for credit through its financing arm rise in recent years. Its lending has risen from £475m in 2009 to £651m in 2013.
Reflecting this development some of the banks are responding with new offerings designed to financing from inside the manufacturing industry itself. For example, RBS now offers a flexible loan with two year interest only payments and thereafter the loans repaid in accordance with a schedule agreed at the outset.

An Alternative to ‘Big Bank’ Business Loans

However today, there is a new alternative for SME manufacturers seeking flexible loan finance. LendingCrowd and other Peer-to-Peer lending sites are an online loan platform which matches businesses seeking loans with investors looking to secure a better return on their money. Offering an easier application, faster decisions, more competitive rate loans from £10k to £1million over 6 months to 5 years than traditional business loan sources such as banks, with no early repayment penalties, and no ongoing information requirement so long as repayments are made. Allied with pragmatic security arrangements the Peer-to-Peer crowd lending business model is building a growing community of borrowers.

Become a LendingCrowd borrower and discover how a peer-to-peer business loan can help your business and the larger industry.

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Gareth Edwards

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