Brexit impacting on manufacturing confidence, says Chamber

Chamber president John McCabe.
Chamber president John McCabe.

A distinct difference in manufacturers’ positive current performance and their confidence in the future, which is down dramatically, is revealed in a new survey.

The latest North East England Quarterly Economic Survey, published today by the North East England Chamber of Commerce, shows key indicators are generally in positive territory.

Companies’ sales and orders, in the UK and overseas, are growing with regional firms continuing to perform strongly and showing a substantial increase on this time last year.

The results also show a very different picture in future confidence for the service sector which is still positive compared to manufacturing views.

John McCabe, Chamber President said: “It is easy to speculate why there is this outlook when in reality there a number of factors that affect business confidence.

“However, the ongoing uncertainty about our future trading relationship with Europe is clearly inhibiting exporters’ ability to plan ahead.”

He added: “The Chamber has been pushing the Government to provide reassurance and clarity to businesses. Regardless of individual perspectives on the referendum and Brexit, it is imperative that our manufacturers are safe in the knowledge they will be able to access all potential markets. If this reassurance is provided, then hopefully the fears expressed in this survey will not come to pass.”

Jonathan Walker, Chamber head of policy and campaigns, said: “Perhaps the most striking aspect of this quarter’s results is the dramatic decline in the future turnover, profitably and workforce scores for manufacturing sector, which is in stark contrast to the optimism shown by service-sector businesses.

“While the uncertainty over future trade is a likely contributor to this, a more immediate factor is the effect of exchange-rate fluctuations. More than two-thirds of our manufacturers see this as a growing concern, while increased competition was the highest overall concern.

“The fieldwork for this survey coincided with a consistent slide in the value of the Pound versus the Euro, which may have fed these concerns, especially for businesses who rely on importing components and products.”