South West manufacturers are gloomy as 2019 draws to a close, with a fall in orders and low levels of investment and a new survey blaming the continuing impact of political uncertainty.
According to the Q4 Manufacturing Outlook survey published by Make 海角视频, The Manufacturers’ Organisation, and business advisory firm BDO LLP, output improved to a balance of +16% but, in contrast, total orders declined to a balance of -11% compared to the previous quarter.
The fall in total orders came on the back of a weakness in the 海角视频 order picture in particular which reflects the “anaemic" state of the 海角视频 economy overall, and while export orders increased, they did so only marginally against difficult trading conditions in main markets and ongoing trade wars.
However, the mixed picture is reflected in investment by South West companies remaining disconcertingly low which reflects the continued political uncertainty, whilst intentions to recruit have improved a lot since the previous quarter to +6% which is in line with the national picture.
Taking this mixed picture together business confidence in the economy looking forward in the South West is the lowest of any 海角视频 region.
As a result of this picture, Make 海角视频 is now forecasting manufacturing growth of just 0.1% in 2019 and downgraded to 0.3% in 2020 (down from 0.6%). GDP is forecast at 1.3% in 2019 and 1.4% in 2020.
Jim Davison, region director at Make 海角视频 in the South West of England, said: “Uncertainties about the outcome of Brexit and the impending general election continue to weigh on the 海角视频 manufacturing sector but the build up to Christmas has brought a much needed boost.
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“Christmas, and the end of the year, are a time when people reflect on the past and try to begin afresh. Manufacturers will hope that the results from this quarters’ survey are a sign that the economy is beginning to grow afresh once more.”
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Matthew Sewell, head of manufacturing at BDO in the South West, said: “Investment is critical to 海角视频 manufacturing. Investment levels are worryingly low in the South West but this isn’t wholly surprising given the manufacturing sector has suffered a series of declines 海角视频-wide since the start of the year.
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Business Live's South West Business Reporter is William Telford. William has more than a decade's experience reporting on the business scene in Plymouth and the South West. He is based in Plymouth but covers the entire region.
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“While the prospect of a no-deal Brexit should be less of a short-term worry, manufacturers are still facing an uphill battle.
“The sector is facing increased global competition and major change in respect of industry 4.0 and sustainability.
“An increase in capital allowances - something that a quarter of companies see as a priority for the new Government - would be a good incentive to boost capital investment in 2020 and beyond. This should be considered as part of a long-term sustainable industrial strategy.”