The latest Supply Chain Funding index (SCFi) — published by the YouGov organisation and the on-line supply-chain funding network Urica — says that 78% of industrial engineering and maintenance services expect to see an increase in turnover over the next year, despite 40% of them experiencing a break in their supply chain in the past 12 months.

The index measures the health of supply chains on a scale of 0-10. The first index, released last October, said that the engineering supply chain stood at 6.5, while the second index, which was released recently, said 6.

Economist John Ashcroft, who is sponsored by Urica, said that the situation could get worse before it gets better: “A further slump towards 5.5 would threaten the capacity of the engineering industry to capitalise on future export opportunities.”

The index also revealed that, six months ago, engineering businesses had a working-capital requirement of 35 days; this has now increased to 49 days.

Sir Ronald Halstead, president of the Engineering Industries Association, said: “The dramatic fall in sterling has made imported components and raw materials significantly more expensive.”

Lindsay Whitelaw, the founder of Urica, said: “Forecasting significant growth while relying on a creaking supply chain is a dangerous strategy and puts business plans at risk.

“If we can move the index towards 7.0 rather than 5.0, we can make a real difference; a 10% shift upwards could generate a 3% increase in growth and productivity. What it needs is growth and productivity. What it needs is more cash in the supply chain.”