Smaller UK factories' sales expectations hit near three-year high - survey

FILE PHOTO - Workers forge at manufacturers Kimber Mills in Cradley Heath, West Midlands, Britain May 15, 2015. REUTERS/Russ Cockburn

LONDON (Reuters) - Sales expectations among small and medium-sized British factories hit an almost three-year high last month, boosted by a strong global economy, adding to positive signals from the manufacturing sector, a survey showed on Tuesday.

Some 72 percent of manufacturers expect sales to increase over the next six months, up from 59 percent three months ago, according to the quarterly National Manufacturing Barometer, conducted by business consultancies SWMAS and Economic Growth Solutions.

Manufacturing was the fastest growing sector of Britain’s economy in the final three months of last year, helping to offset slow spending from consumers who have been squeezed by high inflation since the 2016 Brexit vote.

Tuesday’s survey also showed 56 percent of manufacturers plan to invest in plant and machinery over the next six months, up from 43 percent three months ago.

“Confidence levels are riding high in the manufacturing sector despite market uncertainties, demonstrating the strength and resilience of our SME (small and medium-sized) manufacturers,” said Simon Howes, chief executive of the Exelin Group which owns SWMAS.

The closely-watched IHS Markit/CIPS survey of manufacturing, which accounts for a tenth of British economic output, is due on Thursday.

The National Manufacturing Barometer surveyed 320 companies through January.

Reporting by Andy Bruce; Editing by Ken Ferris