Economic uncertainty contributes to manufacturing slowdown

EEF training centre, Aston
X The Business Desk

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Manufacturing output in the West Midlands fell in the last quarter according to a joint survey from the employers organisation EEF and the accountants BDO.

Falling demand, weaker construction industry supply chain, and political uncertainty in some global markets mean the outlook is “more subdued than it has been for some time” says the survey.

One result of this greater uncertainty and more febrile market is a drop in investment across the UK in general.

While output is still good by historic measurements total orders has fallen significantly chiefly because of weaker domestic demand.

As a result the EEF has issued a revised forecast for overall GDP growth of 1.2% in 2018 and a slightly better 1.3% in 2019.

The EEF director for the West Midlands, Charlotte Horobin said: ” This is a more mixed picture than we have seen for some time and reflects the easing to come from continued political uncertainty in line with the national picture. However the long term prospects for companies in the West Midlands that invest in skills and training in particular will remain bright.”

The importance of skills development and training is made against a background of falling recruitment in the region compared to the recent past.

Jon Gilpin, BDO partner and head of manufacturing at BDO in the West Midlands, said: “Following a strong 2017, we are going starting to see the impacts of the ongoing political and economic uncertainty on manufacturers in the West Midlands. It is now more important than ever for the Government to not lose sight of the needs of manufacturing, or indeed the wider economy, during the continued EU negotiations.

“I have no doubt that manufacturers in the West Midlands will continue to be successful but the right support and trading environment will make a huge difference. Having more transparency from the Government will give them the confidence to invest in skills, automation and digitisation, which are so important to the future of UK manufacturing.”