Executive Briefings

Manufacturers Slow Investment Amid Uncertainty

Spending by manufacturers on plant and machinery is expected to slow over the coming two years, according to research. Manufacturers' organisation EEF said "elevated levels of uncertainty are clouding the ability of businesses to forecast future demand," though this was an underlying trend not altered by June's Brexit vote.

Manufacturers Slow Investment Amid Uncertainty

EEF, in its Investment Monitor 2016 report, found three out of five firms intended to slow spending over the next two years, but "while the referendum did not prove to be the trigger for a change in manufacturers' short-term investment behaviour, that doesn't mean we are out of the woods just yet."

The report said events such as triggering article 50, a major OEM making a big investment outside the UK or the Brexit negotiations were "potential trigger points."

EEF also said the proportion of firms citing political uncertainty as a reason not to invest increased to 25 percent in August, compared to 6 percent in March.

And because of the depreciation of the pound, manufacturers say they are considerably more optimistic about their export prospects than they are about the domestic market.

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EEF, in its Investment Monitor 2016 report, found three out of five firms intended to slow spending over the next two years, but "while the referendum did not prove to be the trigger for a change in manufacturers' short-term investment behaviour, that doesn't mean we are out of the woods just yet."

The report said events such as triggering article 50, a major OEM making a big investment outside the UK or the Brexit negotiations were "potential trigger points."

EEF also said the proportion of firms citing political uncertainty as a reason not to invest increased to 25 percent in August, compared to 6 percent in March.

And because of the depreciation of the pound, manufacturers say they are considerably more optimistic about their export prospects than they are about the domestic market.

Read Full Article

Manufacturers Slow Investment Amid Uncertainty