By Daniel Hunter
Bank lending to UK manufacturers has hit a record low, hampering the sector’s recovery, says Syscap, the leading independent finance provider.
Syscap says that outstanding bank lending to the manufacturing sector fell to £21.2 billion in July 2013, the lowest level since records of lending began in 1986.
Lending to manufacturers has collapsed from its September 2000 all-time peak of £43.6 billion, and from a pre-credit crunch peak of £33.2 billion in June 2008.
Syscap says that while recent months have brought renewed economic optimism, there is a risk that a lack of bank lending will prevent the manufacturing sector from taking advantage of improving conditions.
Philip White, CEO of Syscap, comments: “The lack of funding for manufacturing is one of the major factors holding the sector back from making a greater contribution to the UK’s economic recovery. Unfortunately, this lack of funding is hampering businesses in the sector from making the capital investments they need for growth.”
“If the UK manufacturing sector cannot secure the funds it needs to take advantage of new order flows from a revering economy, then these manufacturers will face a cash crunch and orders will be lost abroad.”
“Boosting the manufacturing sector will be crucial if we are to avoid the house price-driven recovery some economists fear.”
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