SMEs answer call for greater productivity

More than a third (69%) of firms said they expected to increase investment in new technology, machinery or premises in a bid to improve their productivity. The Barometer also revealed that 57% of companies had raised their productivity within the last six months, with four fifths (80%) admitting further efficiency gains were necessary to remain competitive. Cautious optimism remained the other overarching sentiment among the 859 respondents. For the sixth successive quarterly report, more than half of manufacturers (55%) recorded an increase in sales, with 67% expecting to grow between now and the end of March 2015. Furthermore, 95% of firms said they were planning to either maintain or increase their workforce, highlighting the determination to retain skills and build capacity across the supply chain. Business Minister Matthew Hancock said: "Britain's small manufacturers are driving our economic recovery, boosting our national productivity and helping create a record number of jobs. This is part of our long term economic plan to build a better Britain." Steven Barr, head of the Manufacturing Advisory Service, added: "Our Barometer shows that manufacturers are already responding to recent observations by the Bank of England (BoE) that productivity needs to be raised. "It is also reassuring that it's not just the large manufacturers who understand what makes them competitive. Our small and medium firms have also recognised the importance of continually improving productivity." He continued: "This could include anything from introducing new processes and eliminating waste, to upskilling staff and investing in technology and state-of-the-art machinery. "Management teams are continually looking to get more out of the business, a feature that will become increasingly important with the market showing some signs of softening."