|  Updated: 

UK manufacturing firms planning lowest investment since financial crisis

By:

Add as a preferred source on Google
UK manufacturing firms planning lowest investment since financial crisis
An employee of The Morgan Motor Company checks and polishes a car wing section in an inspection bay at the car firm's factory in Malvern, southwest of Birmingham, central England on August 13, 2019. - The Morgan Motor Company was established in 1909 by H.F.S Morgan and have been manufacturing quintessentially British vehicles at their Pickersleigh Road factory in Malvern, UK, for over 105 years. Each Morgan is hand-built using traditional craftsmanship skills from three core elements: ash wood, aluminium and leather. The Morgan family retain a shareholding of the company, alongside majority shareholders Investindustrial, an investment company that also has Aston Martin in its portfolio. Morgan produce just 800 cars per year from three ranges: the 3 Wheeler, Classic and Plus Six, with prices ranging from around 40,000 GBP to over 78,000 GBP. (Photo by OLI SCARFF / AFP) (Photo credit should read OLI SCARFF/AFP/Getty Images)

British manufacturing companies are planning to invest at the lowest rate since the financial crisis next year, a survey showed today, as Brexit uncertainty batters the sector.

Read more: What’s in the WAB? Government’s Brexit bill explained

The sector’s slowdown worsened in the three months to October, with orders for products falling at the fastest pace in almost a decade and output falling after stagnation in the quarter to September.

The CBI’s industrial trends survey of over 250 firms showed that prospects for the following quarter remain downbeat, with firms expecting output to fall at a faster rate in the coming three months.

“Each day of Brexit uncertainty sees firms forced to withhold key investment and recruitment decisions that make a huge difference to communities across the country,” said Tom Crotty, group director of chemicals firm Ineos and chair of the CBI manufacturing council.

Investment by UK companies has slumped in 2019 as firms await some political certainty before opening their wallets. Business investment is around 20 per cent lower since the Brexit referendum than if it had continued on its pre-2016 path.

Prime Minister Boris Johnson will this week attempt to push through his new Brexit deal parliament. Chancellor Sajid Javid has said will let business “get on with taking decisions” on investment.

Britain’s manufacturing sector has also been hit by the US-China trade war and a general global economic slowdown, both of which have dampened demand for products.

The proportion of firms citing political and economic conditions abroad as a factor limiting exports over the next quarter hit a survey record high, the CBI said.

Read more: UK economy close to recession after stagnant services sector data

A lack of confidence led to firms firing workers at the fastest rate since April 2010 in the quarter to October. Businesses said they expect employment to drop at an even faster rate in three months to January.

(Image credit: Getty)