The EEF/AIG Annual Senior Executive Survey shows that whilst companies still expect to see growth in domestic and export orders, as well as employment, in the coming year, they are much less confident than a year ago, especially about prospects for the UK economy.

Aside from Brexit and trade related matters, the survey also shows that cyber security continues to rise up the business agenda with the number of companies citing disruption from cyber-attacks as the most significant risk to their business doubling in the last year.

Commenting, EEF chief executive, Stephen Phipson, said: “While companies are naturally optimistic by their very nature, the spectre of Brexit is now very front of mind for manufacturers. This is bringing with it a whole host of risks from increased exchange rate volatility to rising input costs which right now are very difficult to plan for.

“Business is crying out for some certainty and clarity on moving to a transition period and will have watched the pre-Christmas pantomime in Parliament with dismay. This situation cannot continue.”

Commenting, Simon Gallimore, Manufacturing Industry Group lead of AIG, said: “It’s promising to see that UK manufacturers remain optimistic about the prospects for the global economy, despite the challenges of Brexit and other trade tensions expected in 2019, and the potential for a squeeze on cash flow. Strong credit-management bolstered with trade credit insurance can provide some protection for manufacturers’ revenues, whilst supporting their efforts to expand successfully into new markets."

The survey also shows that delays at customs was a risk for almost four fifths of companies (76%), highlighting the critical need to pursue a Brexit that brings frictionless trade. For 1 in 3 companies delays at customs was seen to be their most significant risk. Furthermore, almost half of companies saw a relocation of a major customer away from the UK as a source of risk, one third of these directly related to Brexit.

The survey covered 242 companies and was carried out from 1 to 21 November.