UK Manufacturers at a ‘standstill’ as 2019 draws to an end due to continued Brexit uncertainty.
Continued Uncertainty 2019 has not been an easy year for manufacturers. Continued uncertainty surrounding Brexit has dominated, while the US – China trade war has contributed to a worldwide slowdown in the sector. Make UK and the IHS Markit/CIPS Purchasing Managers’ Index (PMI) reports were published on the same day and both paint the same […]
2019 has not been an easy year for manufacturers. Continued uncertainty surrounding Brexit has dominated, while the US – China trade war has contributed to a worldwide slowdown in the sector.
Make UK and the IHS Markit/CIPS Purchasing Managers’ Index (PMI) reports were published on the same day and both paint the same picture for the industry, factory output is slowing.
British factories are laying off staff at the fastest rate for seven years and the IHS/PMI report showed that the manufacturing sector slipped to 48.9 in November, down from 49.6 in October. This means that it has been below 50 for seven months, indicating a continued contraction and lack of growth in the industry. Employment in the sector fell for the eighth consecutive month, with the pace of job losses at its steepest since September 2012 as businesses seek to reduce their costs.
Confidence in the economy has picked up slightly, probably influenced by the avoidance of a no-deal scenario at the end of October.
Stephen Phipson, chief executive of Make UK, said: “Uncertainties about the outcome of Brexit and the impending general election continue to weigh on the UK manufacturing sector but the build-up to Christmas has brought a much-needed boost.
“Firms are reporting weaker business activity overall, especially from the domestic UK market, but export orders have increased slightly this quarter, indicating greater confidence from foreign customers about purchasing UK goods as concerns about an end-of-year no-deal Brexit fade.”
Tom Lawton, head of manufacturing at BDO, which helped with the research, added: “Investment levels have slightly improved this quarter following a series of declines since the start of the year. While this is positive, and possibly a sign that the prospect of a no-deal Brexit is less of a short-term worry, firms are still facing an uphill battle.”
It’s not just the UK that is feeling the squeeze, activity declined for the tenth month in a row in the Eurozone, although it has shown some signs of growth from October’s figures of 45.9 to 46.9 in November.
Manufacturers are hoping that the next 12 months will see Westminster returning its focus onto critical issues such as delivering a long-term vision for the economy. With the new year will come new hope that there will be some economic certainty to bolster the performance of UK manufacturing.
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