Manufacturers prioritising investment on plant over export growth, Barclays/WM report finds

Over half of respondents (54%) will be increasing investment spend over the next year, the survey of over 150 site managers revealed. Machinery and machine tools are top of shopping lists (63%) followed by new product development (62%). Only 30% plan to use funds to help them break new international markets, Barclays/WM found. The strong investment intentions come despite 8 in 10 businesses reporting tough trading conditions. Mike Rigby, head of manufacturing at Barclays said: "Whilst it's a tough environment today for UK manufacturers, the survey results show they are in this for the long-run, committed to increased investment to make sure they are in the best possible shape when we come out of recession, and showing that there is confidence in long-term profitability." Exports remain an unfulfilled opportunity for UK manufacturers, the Barclays/WM research found. Nearly half of firms said less than a quarter of their total sales currently come from overseas sales and only 35% see exports growing beyond a quarter of their sales by 2018. BRIC-led export growth has yet to materialise – almost a third don't sell a single thing in Brazil, Russia, India or China, the research found. UK exporters preferred established markets like the US and Germany, the research found. The exporting scene was also dominated by seasoned international traders, the research revealed. Over 60% of those selling abroad have been exporting for over 15 years and only 3% have started exporting in the last 2 years. The biggest barriers to new entrants were cost (47%) and competition (42%).