Irwin Mitchell Says Businesses Must Continue To Prepare For All Scenarios
The UK manufacturing sector has had another difficult month in the face of Brexit uncertainty, posting a four-month low for February of 52.0 according to the latest Manufacturing PMI figures.
Output improved overall for UK manufacturers in February, as firms worked hard to reduce backlogs and stockpile finished products to prepare for the UK’s exit from the EU.
Business optimism however suffered from Brexit uncertainty, as did employment in the sector, which had been buoyant for some time. Job losses in the sector have reached a six-year high.
New order growth has slowed almost to a standstill as domestic markets delay orders amid the uncertainty and exports fall from fears of a global economic slowdown.
Cost pressures however continue to calm and manufacturers have been able to factor these costs in by passing them on to customers, thereby increasing selling pricing.
Expert Opinion“Faced with the level of uncertainty that we have seen over the last month, these results are not surprising. March looks set to see this continue and although there are moves to delay Article 50 and also avoid a no-deal, an orderly Brexit is far from guaranteed and manufacturers must continue to prepare.” Dorrien Peters - Partner
Ricky Nelson, head of corporate dealing at currency specialist, Halo Financial, cautions: “Companies in the manufacturing sector are proactively preparing for what may or may not happen post-Brexit, but the ongoing uncertainty has chipped away at new business and confidence in the sector. Even exports, which have, until recently, been benefitting form a weaker Pound, are falling, and economic fears beyond Brexit are sending ripples across industry worldwide. The US-China trade tensions have had a marked effect on global imports and exports and concerns over a global economic slowdown are sending markets into panic mode.”
Irwin Mitchell recently produced a five point no-deal Brexit action plan for businesses which can be downloaded from here.