A survey by CBI has revealed that UK firms are becoming pessimistic about the current business environment.

Demand for goods from UK small and medium-sized (SME) manufacturers has flattened after nine months of solid growth, and firms have become more pessimistic about the business environment, according to the latest survey from the Confederation of British Industry (CBI).

The experiences of SMEs differed over the last quarter however. Medium-sized manufacturers hit a 12-year high in export orders growth while reporting a moderate decrease in domestic orders. Meanwhile, small firms saw slight growth in domestic orders and stable export orders.

Steve Sharratt, Chairman of the CBI’s SME Council, commented on the findings: “The nine month run of growth that the sector has enjoyed has cooled off, but the detail is more mixed, with medium-sized firms enjoying very strong overseas demand.

“The supply of skilled labour continues to worry SME firms, but it is heartening that they have reacted by expanding and upskilling their workforces.”

Looking ahead, Sharratt called for the more support from the Government, particularly with regard to recent changes to UK Capital Gains Tax which he described as: “A hammer blow to many investment plans, adding further pressure to the SME sector.”

By Natasha Piscitelli