Brexit uncertainty and fears over cyber security have left Britain’s manufacturers much less confident about the prospects for the UK economy than they were a year ago.

With the clock ticking on Britain’s departure from the EU at the end of March, almost three-quarters of manufacturers — 72 per cent — said Brexit was their biggest source of uncertainty, according to a joint survey by EEF, the manufacturers’ trade body, and insurer AIG.

More than four-fifths of companies, or 81 per cent, of those worried about Brexit uncertainty cited exchange rate volatility as a risk to their business plans. The impact of a weaker sterling putting upward pressure on input costs was also cited as a risk by a majority of manufacturers.

Brexit clarity needed

“The spectre of Brexit is now very front of mind for manufacturers,” said Stephen Phipson, EEF chief executive.

“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,” he added.

The EEF/AIG findings reflect those of other surveys published in recent weeks as business frets over continuing uncertainty around the terms of Britain’s exit from the EU. Research into the views of “captains of industry” by Ipsos Mori published last week found that 74 per cent of those interviewed were pessimistic about the year ahead.

Cyber security fears increasing

The survey, which polled 242 companies between November 1 and 21, also showed that cyber security has risen up the business agenda; 63 per cent of companies said they saw disruption from cyber attacks as a risk.

Despite the challenges of Brexit, the findings showed that companies expected that there would be growth in domestic and export orders, as well as employment, in 2019.

Companies were also broadly positive about the prospects for the global economy but in smaller numbers than last year. Half of the companies surveyed said they saw more risks than opportunities in the year ahead, compared with a quarter who saw more opportunities.

Source: Financial Times