Brexit sends Midlands manufacturers reeling but a ‘bounce back’ is predicted

BUSINESS leaders in Greater Birmingham have said they expect manufacturing output from the region to ‘bounce back’ in August after national figures for July showed a 0.9% decline.

Figures from the Office for National Statistics show that manufacturing output fell at the fastest rate in a year in July as the industry was sent reeling by the result of the EU referendum.

Nevertheless, industrial output overall rose, largely due to strong oil and gas production.

This helped overall output increase by 0.1% compared with June – and by 2.1% compared with July 2015.

Paul Faulkner, chief executive of the Greater Birmingham Chambers of Commerce (GBCC), said the latest figures had come as no surprise.

“There was existing evidence that confidence and output in the manufacturing sector fell in July, following the initial turbulence created by the EU Referendum result,” he said.
 
“However, indications for August have been much more positive and we expect manufacturers to bounce back. The (PMI) saw a 41-month low in July but bounced back to an unexpected high of 53.3 in August.
 
“As for how this is affecting local manufacturers, we are currently waiting for the results of our Quarterly Business Report Survey for a detailed look at how the Brexit vote has impacted local businesses so far.”
 
To gain as full a picture as possible, the chamber has appealed to its members to respond to the survey.

Responding to the latest OND data, The Forum of Private Business said manufacturers should search out new opportunities for growth as opposed to reducing their production in the face of uncertainty.

Ian Cass, CEO of the FPB, said: “It is clear that following the Brexit decision there has been a degree of economic uncertainty. The overall indications are that a recession has been avoided though, and that small businesses as a whole remain positive.

“The one area where there is disappointment is with manufacturers, but as a result of the pound’s relative weakness there is the opportunity to find new markets through exporting, and drive growth rather than contract.”