Manufacturers upping game on investment

However, the results also pointed to concerns ahead for small firms, following the recent Bank of England report showing that lenders are now tightening their lending criteria. This is likely to hit disproportionately small firms as the survey showed that the lack of a long and stable track record was more of a hurdle for companies in that sector. According to the survey, in the last year, over 53% of companies had increased investment, with 36% holding investment steady and only 11% proposing to cut back. These figures contrast with official data which it is suggested is not accurately capturing actual investment in manufacturing. However, there are a number of reasons for this, including the shift to intangible investment in areas such as design, marketing and R&D, as well as more investment taking place abroad. These factors highlight the changing face of industry and the shift away from capital intensive manufacturing which is a feature of many countries in the first world. Commenting on the report, EEF chief economist, Steve Radley, said: “Manufacturing businesses are evolving rapidly and entering new markets, increasing innovation and investing overseas all impact on how companies choose to invest. This suggests recent gloom over official data showing sluggish investment levels may have been overdone, given the shift in focus away from capital intensive investment into intangible areas. “However, where barriers remain, they tend to be faced by smaller companies and we would be concerned at any moves to restrict lending because of the recent crisis in the financial markets.”