Brexit means investment outlook is not clear cut, warns manufacturing body

Library image of a trainee technician  Photo:  Ian Nicholson/PA Wire
Library image of a trainee technician Photo: Ian Nicholson/PA Wire
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BREXIT uncertainty is stopping some manufacturers from investing in automation to make them more competitive, according to a new study.

The survey published today by EEF, the manufacturers’ organisation and Santander, suggests that many Yorkshire manufacturers have been forced to take a “reality check” in response to the political environment.

According to the EEF/Santander Annual Investment Monitor, while demand conditions should be spurring on investment, just one third of companies said 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.

Thirteen per cent of companies are holding off investment altogether until there is further clarity on a Brexit deal, the study said.

The report said: “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.”

The EEF believes that measures to boost investment and productivity should be included in the Budget.

Richard Halstead, the 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. The forthcoming Budget can at least start to address the latter of these challenges.”