Brexit fears are already affecting the manufacturing sector, the manufacturer’s organisation EEF has found, saying the sector’s full economic recovery is now in jeopardy.
A survey of more than 400 companies found that UK companies struggle to identify what business opportunities may stem from Brexit, with their business confidence falling sharply.
According to the EEF report, manufacturers’ average confidence score dropped to 5.24 from 6.37 following the Brexit decision, with London seeing the biggest decrease followed by the South East. London-based manufacturing companies, however, still have the highest business confidence, with the current value being 5.7 out of 10. The least confident regions were the East Midlands and North West, which both had a score of 5.0, the report said.
"The Brexit vote has put the manufacturing sector's recovery in jeopardy,” said Lee Hopley, chief economist at the EEF.
"The referendum outcome has provided a jolt and it's clear that there are fresh challenges ahead. Exchange rate volatility, political uncertainty and the danger of increased costs are already causing concern across the regions and business confidence is in short supply.”
According to the report 25 per cent of manufacturing firms in the North West haven’t identified any business opportunities from Brexit yet, while 59 per cent were concerned about weaker demand prospects.
The EEF organisation, which heavily supported the Remain vote, expressed confidence the sector can recover with the help of supportive policies and the right trade agreement and migration policies in place.
The manufacturers, according to the EEF, fear they might lose access the European Single Market, as well as the ability to easily recruit skilled workers from the continent.