South West manufacturers are experiencing difficult trading conditions – due to the ongoing Brexit chaos.
A new report shows that whilst output has remained positive, its strength has fallen significantly since the first half of 2019 whilst orders have now contracted by a balance of -7%.
According to the Q3 Manufacturing Outlook survey - published by Make Ƶ, The Manufacturers’ Organisation, and business advisory firm BDO LL - export orders also fell in the South West, despite a cheaper pound, as overseas customers move away from British goods, and the global slowdown and trade wars take effect.
The regional picture fits with the national one of output continuing to decline from the first half of the year when it was boosted by artificial stockpiling reaching record levels.
Other indicators show just how difficult life is for South West factories with intentions to recruit and invest both contracting.
This shows the region can’t escape the Brexit and trade uncertainty which is hurting other regions, the report said.
South West manufacturing news
As a result of this mixed picture, Make Ƶ is now forecasting manufacturing growth of just 0.1% in 2019 and an “anaemic” 0.6% in 2020.
GDP is forecast at 1.2% in 2019 and 1.6% in 2020. GDP is forecast to be 1.1% in 2019 and 1.4% in 2020.
Jim Davison, region director at Make Ƶ in the West, said: “Industry is facing a perfect storm of factors, compounded by a hard Brexit which could not be coming at a worse possible time.
“In normal circumstances a global slowdown on its own would be enough, but add trade wars and the biggest shock to our economy since the (Second World) War and there seems little doubt that, barring a remarkable turnaround, the sector is heading for recession.”
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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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Matthew Sewell, head of manufacturing at BDO in the South West, said: “Global competition, skills shortages, lack of a coherent industrial strategy from government and continuing technological disruption has made Ƶ 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 manufacturers in the South West.
“A cliff-edge decision on a deal or no-deal Brexit will mean a double-whammy of continuing weaker demand for products and fundamental disruption to supply chains. The Government must strain every sinew to reach a Brexit deal that protects Ƶ manufacturing.”
