Brexit Uncertainty Drives Fall in Export Growth

The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index for November shows improvement, posting a stronger 53.1 figure compared to October’s 51.1.

Output increased in November and there was a rise in new orders, although the domestic market provided more business than exports, given the uncertain political climate. New product launches and building stock were credited as the reasons for the lift in new business.

New export business fell for the second month in a row amid Brexit and trade war concerns. Conversely, the consumer goods sector saw an increase in new exports.

Tony Piggott, head of corporate development at currency specialist, Halo Financial: “While the more positive figure this month has failed to boost the Pound, it’s encouraging to see continued resilience in the face of economic and political uncertainty. 

“Export markets are flatter as the world waits for the outcomes of multiple negotiations, most importantly for the UK, Brexit; and also US-China, NAFTA and other ongoing trade discussions that have an impact on exports.

“However, new trading relationships are being forged and opportunities found amidst the uncertainty. Demand remains for quality British products overseas, with research earlier this year suggesting international shoppers are 68% more likely to buy products made in Britain, and the “Made in Britain” influencing 95% of shoppers’ purchasing decisions.”

Expert Opinion

“Although this latest survey highlights a welcome boost in terms of new business, it is disappointing to see that exports figures are down again.

“It is perhaps not too surprising. UK manufacturers still don’t know what type of Brexit they will be dealing with and therefore many issues such as market access, tariffs, regulation, supply chains and access to labour, remain unresolved.

“At this stage, we don’t know the answer, but whatever happens over the next month or so, there’ll certainly be further changes for businesses, particularly those that trade overseas.”
Dorrien Peters - Partner