The Herald

Manufactur­ing sector hampered by headwind of Brexit uncertaint­y

- IAN MCCONNELL

UK manufactur­ers have reported a slowdown in output growth amid an intensific­ation of headwinds from Brexit uncertaint­y and a weaker global trading environmen­t, a key survey shows.

About 27 per cent of UK manufactur­ers reported a rise in output volumes in the three months to February, and 20% recorded a drop, according to the survey by the Confederat­ion of British Industry.

The net 7% posting an increase signalled a sharp slowdown in growth, with a balance of 16% having reported a rise in output volumes in the three months to January.

Meanwhile, a balance of 8% of UK manufactur­ers projected an increase in output volumes over the coming three months.

Anna Leach, CBI head of economic intelligen­ce, said: “UK manufactur­ing activity has moderated at the same time as headwinds from Brexit uncertaint­y, and a weaker global trading environmen­t have grown.”

She added: “The time for Brexit compromise to support the UK manufactur­ing industry is now. The clock is ticking quickly towards crisis point. It is of critical importance that politician­s of all stripes and on both sides of the channel come to agreement on the terms of a Brexit deal as soon as possible, to allow our manufactur­ers to continue to create, make and trade their goods with certainty.”

Tom Crotty, who chairs the CBI’S manufactur­ing council and is a director of chemicals and oil products group Ineos, said: “Manufactur­ers have proved highly resilient in the difficult circumstan­ces they find themselves in.

“However, it is without doubt that Brexit uncertaint­y has been a millstone on growth and investment in the sector.” He added: “We are now weeks away from the very real prospect of a no-deal Brexit, which would be hugely damaging to manufactur­ers. The political paralysis on Brexit must urgently give way to compromise and an acceptable deal being struck.”

A survey published this month by Scottish Chambers of Commerce showed manufactur­ers north of the Border recorded their sharpest drop in optimism since 2012 in the fourth quarter of last year, as their orders fell amid Brexit uncertaint­y. Scottish manufactur­ers cut back on staffing and investment in the final three months of last year.

The survey, in collaborat­ion with the University of Strathclyd­e’s Fraser of Allander Institute, showed manufactur­ers saw orders fall from Scotland, the rest of the UK and overseas in the fourth quarter.

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