Brexit Damping Investment as U.K. Manufacturers Await ClarityBy
A lack of clarity around Brexit is undermining confidence among manufacturers and damping business investment, according to a report by the EEF and Santander.
Factories invested 6.5 percent of turnover in new plants and machinery in the past two years, down from 7.5 percent reported in 2016, they said, citing a survey of 328 firms conducted in August. A small majority said they intend to spend more on plant and machinery over the coming two years, though.
Uncertainty surrounding Britain’s negotiations to leave the European Union is affecting decisions, with just one third of firms saying that it’s had no impact on plans. A similar proportion said they’re only investing to satisfy current plans and waiting for clarity before committing further, while 13 percent are holding off investment altogether for now.
The EEF, which represents around 20,000 firms, said small and medium-sized businesses are bearing the brunt of the uncertainty, partly as they’re less able to hedge against risks compared with larger companies.