British manufacturers are preparing themselves for ‘another year of risks’, according to manufacturers’ organisation EEF, with almost twice as many expecting the UK’s economy to contract than grow.
According to EEF’s annual survey, 46% of manufacturers say their company faces more risks than opportunities in 2017 with just 23% believing that opportunities outstrip risks.
Manufacturers are realistic about the challenges ahead, but appear to be quietly confident about conditions in their industry. The same cannot be said of broader conditions however. The number of permanent employees and levels of UK sales, exports and productivity are all predicted to head in the right direction; but this is undercut by the expectation that the country will endure poor economic performance in 2017.
Brexit has amplified risks, respondents to the survey said, but six in ten manufacturers still said that the UK was ‘a competitive location’ for their business.
The general pessimism does not translate into lower productivity, with 56% of manufacturers expecting to increase their output this year.
On a global scale, the transition of power in the US and Thailand, and federal elections in both Germany and France, will further contribute to political uncertainty.
Terry Scuoler, CEO of EEF, said: “Global political upheaval means that 2017 looks set to be another bumpy ride, with manufacturers forced to navigate uncertainty, unpredictable economic conditions and a number of risks that have been amplified by Brexit.
“Against this backdrop, a smooth journey is far from guaranteed, but firms are strongly attuned to the challenges and remain fully focused and determined to deliver on their long-term plans for growth. With a new digitally-driven industrial era on the horizon and everything to play for, this long-term vision and focus is vital – despite the peaks and troughs manufacturers cannot afford to be diverted away from where they need to be.
“In many ways 2017 is likely to be another unprecedented year of change and uncertainty, but the UK manufacturing sector remains ambitious, resilient and adaptable. These strengths coupled with firms’ sophisticated and dynamic business strategies should help keep our sector on course and I would urge the Government to play its part too by ensuring that it implements a strong, robust and comprehensive industrial strategy to support UK manufacturing’s drive for growth and technological innovation.”
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