Credit conditions appear to be improving for British manufacturers, but demand for finance is still muted so the new-found stability is yet to be tested, a survey published this morning will show.
The number of manufacturers reporting rising finance costs is slowing, and fewer reported a reduction in funds from their parent companies, according to the report from the EEF, the manufacturers’ group. A quarter of the 328 respondents sought finance for working capital in the past two months, 58 per cent of whom secured all they need and another 32 per cent obtaining a part.
Lee Hopley, the chief economist at the EEF, said: “Evidence that credit constraints have started to calm down will help build some confidence across the sector. But we are only at the early stages of a recovery and as demand for finance has been subdued the financial system has yet to be tested. The key question is whether the Banks will be there for manufacturers as a return to growth generates greater demand for finance.”