Brexit draining manufacturers

Deal uncertainty sparks worst dip for two years

GROWING worries about Brexit have led to the UK’s manufacturing sector recording its weakest performance in more than two years.

Business optimism has also dipped to a 22-month low. And new export orders shrank for the first time since April 2016 as foreign demand for UK goods plummeted despite the weak sterling exchange rate.

The number of new jobs stagnated during August, particularly at larger manufacturers.

The manufacturing sector decline is measured by the Markit/CIPS UK Manufacturing purchasing managers’ index.

A figure above 50 indicates growth. But last month the index dipped to a reading of 52.8 in August, from 53.8 in July. It is the worst figure for 25 months.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “With a subdued global economy threatened by escalating trade wars and Brexit uncertainty making its mark, it’s unclear where future opportunities to sustain the health of the sector will come from.”

Helena Sans, Head of Manufacturing at Barclays added: “The improving performance we’ve seen in exports over the past two years, boosted by the weakness in sterling, took a worrying hit last month.

“Political and economic uncertainty is clearly impacting manufacturers’ investment intentions. “In order to increase exports and drive growth, what manufacturers need to see sooner rather than later is a Brexit transition deal to avoid the risk of prolonging a more cautious and tentative approach to investment from the sector.” Barclays bank has launched a new trade centre in the Midlands to boost UK exports. Staffed by 30 export and trade product specialists, it will provide support to 1,000 firms.