Brexit vote causes factories to rein in investment plans, survey finds

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5th September 2016 11:30 - Industrial

Brexit vote causes factories to rein in investment plans, survey finds: According to a survey by the industry body for engineering and manufacturing employers, EEF, and accountancy firm, BDO, manufacturers in Britain are cutting their investment plans in the wake of the Brexit vote.Brexit vote causes factories to rein in investment plans, survey finds

The survey of 450 manufacturers also uncovered that there has been no initial big impact since the EU referendum, however, the vote may cause concerns about the long-term health of Britain’s economy. Alongside the positive news that there’s been no immediate ‘big hit’ to the sector’s activity since Brexit, there was also a drop in the value of the pound which boosted export orders.

Since June, it can be seen from the survey that manufacturing output has worsened as domestic orders have decreased. This in turn has reversed the improvement seen earlier in 2016.

The Bank of England is expected to see the manufacturer’s weaker investment plans as being in-line with its forecast that Britain is heading towards an uncertain future as they believe that Brexit will take a toll on the UK’s trading with the European Union.

Further to the survey findings, the EEF’s indicator of investment plans for the upcoming year fell by one point to 10, which represents the lowest score since 2009.

However, despite the uncertainty, the survey findings revealed that the respondents mainly anticipate the orders and output to improve, especially for exports. As well as this, it was found that the recruitment intentions also improved.

The industry body also noted that there has been increasing price pressures within factories as a result of the weak pound raising the cost of imported items. They also anticipated that Britain’s economic growth will plateau in the last half of 2016 and remain weak into 2017.

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