Publishing the survey, EEF, the manufacturers’ organisation used the figures to urge government to speed up the implementation of various finance schemes which have yet to come into operation and communicate them clearly to companies.
According to the survey 37% of firms reported an increase in the cost of finance in the past two months. In addition, companies reported that the availability of finance continued to dry up with almost half of companies seeing a decrease in the availability of new lines of borrowing, up from 39% in the previous quarter.
Commenting on the results Steve Radley, EEF Chief Economist, said
"Despite interest rates falling to a historically low level and the efforts to free credit markets so far, many manufacturers have yet to feel the benefit. Addressing the problems in the banking system remains a priority but some schemes to support lending to companies have yet to come on stream. Time is now of the essence for government and the Bank to put these in place and communicate clearly what is available to companies."
In addition, the survey also showed that companies are facing increasing problems obtaining credit insurance. Around two-thirds of companies had seen credit insurance reduced or withdrawn, confirming growing reports that insurers are pulling out of the market.
Steve Radley added:
"The speed of withdrawal of credit insurance is continuing to weigh on manufacturers and their supply chains. Action from government to slow the withdrawal of credit insurance is becoming increasingly urgent."
ENDS
The survey was conducted between January 29 and February 18 with 668 companies responding.