New study by EEF, the manufacturers’ organisation, and banking giant Santander, claims political uncertainty over the UK exit from the EU is the cause of a ‘wait and see’ approach. Tony McDonough reports
A significant number of manufacturers in the North West are holding back on investing in their businesses until they have more information about Brexit.
In a major study published on Monday by EEF, the manufacturers’ organisation, and banking giant Santander, companies are being impacted by the ongoing political uncertainty around the UK’s departure from the EU.
The study also reveals that the UK already lags behind its European counterparts in investment in machinery and robots, with a number of barriers at play including cost, uncertainty about returns and skills.
According to the EEF/Santander Annual Investment Monitor, while demand conditions should be spurring on investment just one third of companies say that Brexit has had no impact on their plans.
A similar proportion are only investing to satisfy current plans and waiting for clarity on any deal before investing further, while at the other end of the spectrum 13% of companies are holding off investment altogether until there is further clarity on a Brexit deal.
Taken together this leaves the outlook for investment by manufacturers finely balanced with only a narrow majority expecting to be investing more on new equipment in the next two years.
While the reticence emanating from other parts of the global economy has diminished, the survey reflects increasing Brexit-related uncertainty.
Richard Halstead, membership engagement director for EEF in the North, said: “Manufacturers have navigated a panoply of demand-related challenges in recent years, which have taken a toll on the sector’s appetite and ability to invest.
“With global demand on the up conditions should be ripe for industry to make new investments in capacity and productivity enhancing technology.
“But Brexit means the future outlook for investment is not clear cut.
“Political uncertainty is adding to the hurdles of cost and lack of skills in holding back spending on automation technology.