Positive outlook for UK manufacturing small businesses in a quarter rocked by market uncertainty
February 20
10:13
2023
The beginning of 2023 has seen a significant rise in manufacturing small businesses predicting growth in the next three months, from 35% in Q4’22 to 44% this quarter, according to new research by Novuna Business Finance. The results found that the proportion of businesses in the manufacturing sector anticipating growth in the next three months was at its highest proportion for 12 months.
Meanwhile, the proportion expecting to contract in the next three months fell slightly on last quarter, (18% in Q4’22 vs 16% in Q1’23), although is above average for the past two years (13%).
These are some of the latest Business Barometer findings by Novuna Business Finance, a study that has tracked small business outlook every quarter since 2015.
Compared with the national average, small businesses in the manufacturing sector stood out as having one of the best outlooks of any sector. Nationally, the research found 33% of small businesses were predicting growth in the next six months. Only businesses in the IT (42%) or media (49%) sectors were more likely to be anticipating growth.
The latest findings suggest that, nationally, small business growth predictions are largely unchanged on previous quarters – but, within this, there are both promising and concerning indications for the year ahead.
On the upside, Novuna’s latest data reveals that for the third consecutive quarter, the proportion of small businesses predicting growth for the next three months has remained remarkably stable – suggesting an underlying resilience despite a very challenging economic context. Of concern, the Novuna data also suggests that, since 2017, small business figures for Q1 each year have usually been the high-point for the year that follows – and Q1 2023’s figures are well below the 36%-40% range that historically has dominated the first quarter of each year dating back to 2015 (the only exception being Q1 2021, when the UK started a New Year in lockdown).
Jo Morris, Head of Insight at Novuna Business Finance, comments: “Despite the bleak economic forecasts at the start of this year, our latest tracking data shows underlying resilience from established small businesses. At a time of rising prices and supply chain disruption, small businesses in the manufacturing sector seem to be bucking the trend with an optimistic outlook for the months ahead.
“Overall, however, the results by sector do present a picture of volatility – but, the one thing every small business has in common at the moment is the need to accept uncertainty. Whether growing, restructuring or consolidating, every business needs a plan and Novuna Business Finance will be there to support established enterprises that are working on strategies to adapt, grow and fulfil their potential despite the enormously challenging context.”
Growth forecasts for manufacturing small businesses: a two-year view
|
|
Q1’21
|
Q2’21
|
Q3’21
|
Q4’21
|
Q1’22
|
Q2’22
|
Q3’22
|
Q4’22
|
Q1’23
|
|
Significant expansion
|
38%
|
10%
|
6%
|
12%
|
6%
|
4%
|
2%
|
3%
|
3%
|
|
Modest organic growth
|
5%
|
27%
|
23%
|
36%
|
40%
|
36%
|
32%
|
32%
|
41%
|
|
Stay the same/ no change
|
29%
|
52%
|
56%
|
41%
|
42%
|
44%
|
50%
|
41%
|
39%
|
|
Contract/ scale down
|
9%
|
7%
|
7%
|
6%
|
6%
|
10%
|
9%
|
15%
|
9%
|
|
Struggle to survive
|
19%
|
4%
|
8%
|
3%
|
4%
|
6%
|
5%
|
3%
|
7%
|
