Domestic orders and output in the manufacturing industry both rose for the fourth consecutive quarter, according to the CBI’s SME Trends Survey.
Growth was strong and is expected to continue over the next three months.
Employment figures also rose over the last quarter, with the fastest pace of increase since records began in October 1998.
Firms were optimistic about their business situation, but export orders did not reflect this, remaining flat.
Katja Hall, deputy director-general for the CBI, said:
“Export orders have underperformed this quarter, which may in part be because of the strength of Sterling.
“We need the Government to get behind our small and medium-sized manufacturers to help them to sell their products and services to new markets around the world, giving a sustainable boost to long-term growth.”
Lack of government backing could be causing slow growth in other SME dominated industries, such as hospitality, construction and retail.
A survey by Boost Capital revealed that these sectors are showing much slower growth than others.
Marc Glazer, CEO of Boost Capital, said:
“The stunted growth, often in sectors with large numbers of SMEs, could be caused by numerous reasons given the incredibly bumpy ride for the UK economy in the last seven years. Mostly, from what we have seen on the ground… SMEs are still not being given the financial footpaths to grow.”
Imnage by Joshua Mauldin