Make UK and business advisory firm BDO (Binder Dijker Otte) have published the results of their third-quarter 2019 business performance survey.
Carried out between 31 July and 21 August, the survey is based on responses from 292 companies
According to the related report, manufacturing in Britain continues to ‘nosedive’ as Brexit, market slowdowns and regional trade wars take their toll on major markets.
The survey shows a weakening currency has not supported any business growth, ‘contrary to claims from some politicians and commentators.
British goods are reported as being an average of 6% cheaper for foreign companies, year-on-year.
Tom Lawton, head of manufacturing at BDO said: “Global competition, skills shortages, lack of a coherent industrial strategy from government and continuing technological disruption has made UK manufacturing a challenging sector for decades. The long shadow cast by the possibilities of a no-deal Brexit and the uncertainty of recent months has only added to the difficulties for the sector.”
Lawton further pointed out that a no-deal Brexit would result in a ‘double whammy’ of weaker demand, together with supply chain disruption.
According to the survey, the total order balance remained at +2%. But this was down from +8% in Q2 and +16% in Q1, indicating how the market has weakened since the beginning of the year.
Output also saw significant declines, down to +4% (+17%, Q2). This indicates there is little stockpiling of finished goods, which could leave businesses unprepared for a no-deal Brexit scenario.
In light of these figures, it comes as no surprise that investment and recruitment have shown significant weakening. Discounting the seasonal rise of Christmas 2018, recruitment has fallen for six consecutive quarters.
Business investment has fallen into negative numbers for the first time since Q3 2016.
As a result, Make UK is now forecasting manufacturing growth of 0.1% in 2019 (down from 0.2%) and 0.6% in 2020 (down from 0.8%). GDP forecasts show +1.1% in 2019 and +1.4% in 2020. All forecasts are based on avoiding a no-deal Brexit scenario.