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The latest Manufacturing Barometer report, published by SWMAS, indicates concern over Brexit by UK manufacturers and an anticipation of lower business growth over the next six months.
According to the latest national Manufacturing Barometer, published by SWMAS (part of the Exelin Group), the proportion of manufacturers anticipating business growth is significantly lower as a result of Brexit.
The report, which was specifically focused on ‘Brexit readiness’, included responses from more than 400 senior decision makers from small to medium-sized enterprises (SMEs) in the United Kingdom, more than half of whom believe Brexit is harmful to their businesses in the short term.
From those surveyed, it was found that there was a 13% drop in the number of manufacturers expecting an increase in sales turnover in the next six months. With this drop, the level of expected growth has been reported to be at its lowest for six years. Additionally, nearly a quarter (24%) of manufacturers surveyed stated that they expect to see a reduction in profits with only 39% anticipating an increase over the next six months.
"What we are clearly witnessing is manufacturers putting the brakes on new investments and recruitment whilst some enter survival mode caused by ongoing Brexit uncertainties," explained Simon Howes, managing director of SWMAS, in a press release. "However, we are also seeing signs that suggests our SME manufacturers are looking at their own ways to change and adapt to meet the Brexit challenge, such as intentions to start exporting or to export more, development of new products, and improvements in efficiency and productivity."
Dean Barnes, regional director of Economic Growth Solutions, added, "Brexit, and the continuing lack of clarity it brings, is certainly a significant factor in the concern manufacturers have for the future of their businesses. Our research has found that over half of UK SME manufacturers predict that Brexit is detrimental to their business in the short term or threatens their survival, compared to the 36% who say they are optimistic about the new opportunities ahead."
When assessing the preparative measures SME businesses are taking in relation to Brexit, it was highlighted that the majority are planning for the risks rather than opportunities of the forthcoming exit of the UK from Europe. Some manufacturers stated that they are stockpiling raw materials or even finished products to ensure they are ready for Brexit, with some also looking at strengthening relationships or developing new ones to tackle any concerns around disruptions to the supply chain.
"Driven by a lack of information about what Brexit actually means, there is a strong sense of manufacturing businesses simply not knowing what to do," continued Howes. "That said, there are also encouraging signs that these companies are adopting a pragmatic approach wherever they can and making plans around what is in their control, namely: export, investment in existing staff, improved efficiency, and strengthening relationships with customers and suppliers."