Regional Manufacturing Outlook is an annual report that looks at ONS figures and survey data to paint a picture of the long-term health of UK manufacturing. The latest report shows that confidence before the referendum (Q2 2016) was an average of 6.37 out of ten; since the vote at the end of June, that figure has slipped to 5.24.
London and the South East suffered the largest fall in confidence, falling from 7.3 out of ten before the vote to 5.7 now. However, the region still leads the rest in terms of overall confidence. The score of 5.7 puts it ahead of second-placed Yorkshire & Humber, which has a score of 5.4 out of ten. Both the North West and East Midlands come in last place, with a score of just five out of ten.
The North West is also the region with the worst outlook on the post-Brexit future – a quarter of the companies surveyed cannot see any business opportunities arising from the decision. In the East Midlands, the Brexit decision is set to lead to a review of UK recruitment for 19% of manufacturers. The region also showed the highest level of concern about exchange rate volatility (84%) and increased costs (66%).
By contrast, 51% of manufacturers in London and the South East have said that the falling Pound is a benefit to them.
“The Brexit vote has put the manufacturing sector’s recovery in jeopardy,” said Lee Hopley, chief economist at EEF. “The growth path is now uncertain in all regions.”
Tom Lawton, partner and head of BDO Manufacturing, added: “The impact on confidence was expected [post Brexit], but should not detract from the fact the UK manufacturing performance over the last 12 months has been strong with six [out of ten] regions seeing an increase in output.
“I firmly believe that UK manufacturers have the skills and adaptability to deal with the challenges ahead, and am confident they will make the most of the opportunities that arise.”
