By Peter Marsh
High-tech manufacturing businesses are in a position to expand, but economic concerns and a lack of funds or skilled staff are deterring many from doing so, according to a report backed by General Electric, the US industrial group.
The survey of 400 companies indicates that while many are successfully shrugging off the general mood of economic gloom,a large percentage are deferring growth plans.
The findings are likely to disconcert government ministers who are keen to see manufacturing pick up momentum and so drive an economic rebound.
The results also support those who are lobbying the coalition to agree more policies to back manufacturers as a way to pursue a broad economic rebalancing over the next few years.
The companies in the survey were chosen to reflect relatively technologically complex areas of industry, with many making products in narrow product fields, and selling globally with just a few competitors.
Of the respondents, more than three-quarters said they felt ?positive? about business conditions, with almost one in three working at or close to full capacity.
However, in spite of this relatively upbeat mood, only 21 per cent of the companies said they were planning to increase capacity. Several cited specific factors such as shortages of financing from banks or general worries about global demand as being at least partly to blame for the situation.
Richard Slack, managing director of Leeds-based Fibre Extrusion Technology, which makes specialist machines for producing textiles that are used in the medical device industry, said: ?We have been expanding quite quickly, but are rather cautious about the future. I?d be very reluctant to go to a bank to ask for a loan [for an expansion scheme] because in my view many of them are hopeless.?
At Cheltenham-based Ultra Dynamics, which makes special engines for boats, Richard Godfrey, company secretary, said: ?There?s a general state of mind at the moment where it does not seem too sensible to invest in expansion, even if we are bursting at the seams [with orders] and business prospects look good.?
Steve Radley, head of policy at the EEF manufacturers? federation, said the results from the survey indicated that there were a ?number of policy levers that the government could pull? – for instance in helping to support bank loans or providing grants for equipment purchases – to help the sector expand at a greater rate.
However, some manufacturers are casting any concerns to one side. Maurice Critchley, managing director of Severn Glocon, a valve maker, said he was planning a ?2.5m expansion scheme in the next 18 months.
Terri Gill, managing director of Precision Acoustics, which makes test equipment, said: ?I feel fairly confident. We have plans in place to increase sales to about ?2.5m in 2015, from ?1m last year.?
? The Financial Times Limited 2011