Manufacturers unmoved by credit conditions
Midlands manufacturers have reported a mixed bag of results relating to existing credit conditions. According to the latest credit conditions survey by manufacturers’ organisation EEF, the availability of new lines of borrowing increased for 13 per cent of companies, compared with 8 per cent in Q2, but the cost of new borrowing rose for 37 cent of companies.
The number of manufacturers in the region reporting a rise in the cost of borrowing increased from 32 per cent in Q2.
Over the past two months the overall cost of credit for manufacturers in the Midlands has remained largely unchanged, according to the survey. However, EEF said that there are some signs that supply problems are “starting to moderate” for medium and larger companies.
EEF Midlands director Martin Wassell said: “The recession and the crisis in financial markets have worsened the costs and conditions attached to accessing finance and the credit markets for many businesses. Despite the pick up in the economy, too few companies are seeing a significant improvement in lending conditions.
“This was never likely to be a swift or easy process, but we are concerned that the rise in the cost of new borrowing may be signalling that the supply of finance is not able to keep up the upturn in manufacturing activity.”
