Britain’s manufacturers have slashed their forecast for growth next year with a darkening picture for exports ahead of the departure from the EU.
The Make UK/BDO Manufacturing Outlook Q4 2020 survey lays bare the brutal impact of the pandemic with the sector forecast to see a 12% drop in output this year, while Make UK has also substantially downgraded its growth forecasts for 2021 to just 2.7%, down from 5.1% last quarter.
Should the UK leave the EU with no trade agreement in place then this forecast may be revised further given the potential for significant damage to manufacturing, with the motor vehicles sector in particular especially fearful of the potential impact of any tariffs.
In addition to the darkening picture for exports, the survey shows investment intentions have now been substantially negative for three quarters in a row, a trend which is likely to worsen in the event of the political turmoil that ‘no deal’ will create.
It is essential that the first step towards a fuller recovery is provided by a comprehensive tariff and, quota free, trade agreement with the EU with a sensible range of easements to allow business some time to adapt.
Stephen Phipson CBE
Chief Executive, Make UK
After a torrid year, manufacturers who rely on Continental supply chains and export markets now face a race against the clock to prepare for the end of the transition period. The prolonged negotiations with the EU have made this far more difficult than it should have been. Manufacturers are now desperate for greater clarity so that they can be released from the post-referendum paralysis which has made it nigh-on impossible to take long term decisions.
