Concerns that political and economic conditions might limit export orders in manufacturing over the next three months are at their highest since immediately after the EU Referendum, according to the CBI’s latest quarterly industrial trends report.
CBI chief economist, Rain Newton-Smith, said the figures were “sobering” and demanded immediate action at home and abroad.
“Planned investment is being scaled back in the face of deepening Brexit uncertainty, so it’s vital that the Chancellor incentivises manufacturers to spend in areas that will help them become more productive. Using the upcoming Budget to increase the Annual Investment Allowance, alongside a wider review, could help the UK become more competitive with its global peers.
“Combined with meaningful business rates reform, these steps can help the UK economy to make the advances in digital and new technologies envisaged in the Industrial Strategy.
“Aside from much-need progress on domestic policy, the Government’s number one priority on Brexit must be securing the Withdrawal Agreement, ushering in a much-needed transition period that will give businesses the breathing space they need.
“Protecting jobs and people’s livelihoods from a lost generation of investment remains urgent.”
Mirroring this view, group director of INEOS and chair of CBI Manufacturing Council, Tom Crotty, said the main priority for manufacturers over the coming months will continue to be for the government to protect frictionless trade with the EU after Brexit, adding that the Autumn Budget also presents an excellent opportunity for the Chancellor to give the sector a “welcome shot of optimism”.
Looking more broadly at the UK economy, the business group says services growth is holding up but overall growth is expected to remain subdued, reflecting weak household income growth and the drag on investment from Brexit uncertainty.
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