86% of SME manufacturers in England plan to invest in new equipment over the next year, according to the Manufacturing Advisory Service (MAS).

The survey of 864 small manufacturing firms found that small manufacturing businesses were looking to spend £121,000 each on average.

Steven Barr, Head of MAS, said:

“Importantly, 6% of smaller businesses are looking to spend more than £500,000. This is a significant figure and proves that SMEs are prepared to invest ‘big’ in order to take advantage of opportunities presented by the upturn.”

The main goals for these investment plans were improving efficiency and quality (31%), followed by development of new products or processes (30%) and finally boosting existing capacity (22%).

In terms of funding, fewer than one in five companies (19%) said they planned to approach banks, with manufacturers instead choosing to secure money via grants (27%) and the government’s Regional Growth Fund (21%).

Michael Fallon, business and energy minister, said:

“These figures point towards signs of a renaissance in manufacturing. SMEs are increasing in confidence, and looking to both recruit and invest.

“We’re committed to working closely with the manufacturing sector to provide a strong base for the recovery, and create growth for the future.”