Britain’s manufacturers have ended the year at a standstill as the toll of ongoing political uncertainty and downturn in major global markets shows little sign of ending anytime soon.
Our latest survey of UK manufacturers shows that a quarter (25.7%) view increasing investment allowances as the main priority for the new Government, with a fifth believing cuts in corporation tax should be the priority. Manufacturers’ confidence in the economy has picked up slightly but this is likely to have been influenced, according to Make UK, by a ‘no deal’ cliff edge being avoided at the end of October.
However, this respite is most probably temporary and only when the uncertainty over the direction of travel on Brexit has ended will manufacturers really turn on the taps of much needed investment to boost the UK’s productivity performance.
Firms are reporting weaker business activity overall, especially from the domestic UK market but export orders have increased slightly this quarter, indicating greater confidence from foreign customers about purchasing UK goods as concerns about an end of year no-deal Brexit fade.
Investment levels have slightly improved this quarter following a decline since the start of the year. While this is positive, and possibly a sign that the prospect of a no-deal Brexit is less of a short-term worry, firms are still facing an uphill battle.
Stephen Phipson
Make UK, CEO
Investment is critical to UK manufacturing. The sector is facing increased global competition and major change in respect of industry 4.0 and sustainability. An increase in first year capital allowances - something that a quarter of companies see as a priority for the new Government - would be a good incentive to boost capital investment in 2020 and beyond. This should be considered as part of a long-term sustainable industrial strategy.
