• Six in ten manufacturing SMEs predict turnover growth in Q1, Paragon Bank research finds
• Improvements to cost of goods and services boost confidence levels as manufacturing SMEs plan to take on more staff
• Growth ambitions supported by 74% of firms seeking investment to invest in operations

Manufacturing SMEs are set to put the economic challenges of last year behind them and plan on invest in their businesses and recruit more staff thanks to increased turnover.

Paragon Bank research found that six in ten (62%) of manufacturing SMEs expect turnover to improve in Q1 compared to the same period in 2022 – with a fifth (20%) of operators in the sector expecting it to rise by over 5%.

Carried out by Opinium, the research found that manufacturing SMEs expect turnover to grow by an average of 2.1% in 2023 - an increase on the 0.6% growth recorded in 2022.

The new research also found that turnover growth expectations for 2023 coincide with renewed optimism within the manufacturing sector with 63% of SMEs confident for the year ahead and only 17% expressing concern.

Staffing levels are also set to increase in 2023 with 69% of manufacturing SMEs planning to have more full-time staff by the end of 2023, with 11% expecting full time staff numbers to decrease.

Renewed confidence in the maunfacturing sector follows improvements in the reliability of suppliers, payment terms, and the costs of goods and services - but concerns remain over availability:

• Costs of goods and services (Improved 53% / Worsened 35%)
• Payment terms of suppliers (53% / 12%)
• Supplier reliability (49% / 27%)
• Availability of goods (32% / 34%)

Finding that 74% of manufacturing SMEs have recently sought financing to invest in their operations, the research identified the areas the sector is due to invest in the year ahead:

• Machinery: 21%
• Staff training: 21%
• Commercial vehicles: 18%
• Staff recruitment: 18%
• IT technology: 16%
• Purchasing additional premises: 14%
• Research and development: 14%
• Improvements to premises: 12%

Commenting on the research findings Wayne Hall, Paragon Bank’s manufacturing finance lead, said: “After modest turnover growth in 2022 it is very encouraging to see manufacturing SMEs are looking to the future with confidence and are set to see improved turnover in 2023.

“With increasing stability in supply chains and decreasing costs of goods and services, the manufacturing sector has strong grounds for optimism – and plans to increase the level of full-time staffing demonstrates that businesses are ready to take full advantage of the opportunities that 2023 will bring.”

He continued: “If manufacturing SMEs are to meet their turnover expectations it is essential that they can secure the invest they require. As SME lending specialists, Paragon understands not only the challenges firms may face but also their determination for growth. Through working with SMEs to deliver tailored financing to suit their requirements, we were pleased to support the manufacturing sector through the challenges of recent years and are ready to do as the sector continues to recover and grow.” 

For further information contact:

Tom Frew
Media Relations Manger
Paragon
E: [email protected]
www.paragonbank.co.uk

Notes to editors:

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £13 billion of assets under management and manages over 450,000 customer accounts.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ.