Sterling’s boost to exporters won’t last long enough, warns the boss of Gripple

MANUFACTURERS THAT export have been boosted by the plunge in the value of the pound. However, a senior manager at a Sheffield-based company does not expect the boost to last long enough to justify speeding up investment plans.

The sharp fall in the value of sterling has pushed up the value of the goods British manufacturers export by 15 per cent since a year ago.

Some hope the boost to manufacturers will foster a rebalancing of the economy, which has long relied on domestic consumers.

Sheffield-based Gripple has 85 per cent of its customers abroad. But the firm, which makes metal parts used to connect and tension steel cables, does not expect the boost to last long enough.

Gordon Macrae, general manager at Gripple, said: “My honest view is that the government is slightly delusional if it senses there is a great opportunity for companies with the current value of sterling.”

Advocates of Brexit say that the cheaper pound will stimulate exports and investment and have seized on the improved trade figures to talk of an export boom for Britain ahead of the general election in June. The Bank of England is predicting that export growth will outpace domestic consumption this year as rising inflation, also largely a product of the weaker currency, eats into households’ spending power.

But Mr Macrae said Gripple, whose customers prefer to be billed in their local currency, was wary of using the changing exchange rate to compete on price.

“In terms of being able to build long-term customer relationships, the worst thing you can do is to be moving your prices up or down,” he said.

Instead, customers pay a premium for products Gripple says are easier to install than its rivals and have stronger after-sales support. Gripple’s ability to cut prices is also limited by the cost of raw materials. Zinc prices have doubled in dollar terms since the end of 2015, and sterling’s fall has intensified the effect.