Manufacturing Outlook 2019 Q2
The Q2 Manufacturing Outlook survey published by Make UK and BDO LLP, shows that whilst domestic and export orders are in positive territory they are trending downwards as the boost of artificial stockpiling winds down and overseas customers are switching their supply chains away from the UK.
As a result, investment by the sector has been paralysed with no evidence that there is pent up demand waiting to be unleashed and, whilst business confidence has held up with the relief of ‘no deal’ being avoided twice it remains below the levels seen ahead of the EU referendum in 2016.
Whilst domestic and exports orders are still in positive territory there is a clear weakening trend which, if it continues, would push some elements of industry over the edge before too long.
“Earlier this year there was clear evidence that industry was on steroids as companies stockpiled. Underneath, however, there is growing evidence of European companies abandoning UK supply chains whilst Asian customers balk at the unknown of what may exist as the UK leaves trade agreements which operate under EU rules.
“With this picture it would be the height of economic lunacy to take the UK out of the EU with no deal in place. This race to the bottom in the interests of party ideology has to stop otherwise there will be a heavy price to pay.
Seamus Nevin
Chief Economist, Make UK
Official data shows a consistently downward trend in investment intentions since the EU referendum in 2016. The impact is severe, with UK manufacturing at risk of investment paralysis as the uncertainty of Brexit drags on.
“Companies need to prepare for a more digitally-fluent future, both in terms of the technologies they deploy and the people they employ, but right now manufacturers are not confident of a future worth investing in.
“Stockpiling is dying down, export orders continue to fall away global competition keeps on increasing. Combine that with a government mired in chaos and we’re now starting to see a true reflection of the crippling anxieties the sector is facing.
Tom Lawton
Head of Manufacturing, BDO