Manufacturers have voiced their concerns over a no-deal Brexit, as the outlook for growth prospects has decreased in the coming year according to a survey by the EEF, the manufacturers’ organisation and the global insurer AIG.
The EEF/AIG Annual Senior Executive Survey of 242 manufacturing businesses showed that whilst companies still expect to see growth in domestic and export orders, as well as employment, in the coming year, they are much less confident than a year ago, especially about prospects for the UK economy.
Almost three quarters of manufacturers (72%) said the UK departure from the EU, and the consequences surrounding it, is their biggest source of uncertainty. Within this over four fifths of companies (81%) identified exchange rate volatility as a risk to their business plan, with only one fifth of companies saying significant currency movement was not a risk in 2019.
Other key findings from the survey include:
- Half of companies see more risks than opportunities, one quarter see more opportunity than risk
- A balance of just over 6% of companies more optimistic about global conditions, down from over one quarter last year
- Companies responding by stockpiling and reviewing supply chains
EEF CCEO Stephen Phipson said: “While companies are naturally optimistic by their very nature, the spectre of Brexit is now very front of mind for manufacturers. This is bringing with it a whole host of risks from increased exchange rate volatility to rising input costs which right now are very difficult to plan for.
“Business is crying out for some certainty and clarity on moving to a transition period and will have watched the pre-Christmas pantomime in parliament with dismay. This situation cannot continue.”
He added: “The Prime Minister’s deal is the right one and it is to be hoped that MPs will return to Parliament this week with the very clear message from businesses that they must back it so we can move forward with negotiations on our future relationship with the EU. No deal is simply not an option for UK manufacturers.”