Yorkshire manufacturers are continuing to see mixed trading conditions ahead of the new year as research shows the impact of political uncertainty dragging on.
A survey published by manufacturing group Make UK and business advisory firm BDO indicated both output and total orders in the region remained reasonably healthy and significantly ahead of the national picture overall, though output may have been boosted by stockpiling ahead of the October Brexit deadline.
The improvement in total orders comes on the back of a modest improvement in UK orders, while by contrast export orders performed very strongly against the national picture and reflects well on companies in the region at a time of difficult world markets and trade wars.
In addition, intentions to recruit by Yorkshire companies remain strong, whilst investment intentions were the strongest of any UK region, way above the national figure.
As a result of an improved picture since the last quarter confidence amongst manufacturers for their prospects looking forward has increased and is above the average for all UK regions.
However, nationally, Britain’s manufacturers ended the year at a “standstill” amid ongoing political uncertainty and a downturn in major global markets. The survey of more than 330 companies indicated they will only ramp up investment when the “direction of travel” over Brexit becomes clear.
The study suggested that total orders for manufacturers had ground to a halt and were “way down” from the peaks of 2017.
Make UK said one in four of companies view increasing investment allowances as the main priority for the new government, with a fifth wanting cuts in corporation tax.
Manufacturers’ confidence in the economy has picked up slightly but this is likely to have been influenced by a no-deal cliff edge being avoided at the end of October, said the report
June Smith, region director at Make UK in the north of England, said: “Uncertainties about the outcome of Brexit and the impending general election continue to weigh on the UK manufacturing sector but the build up to Christmas has brought a much needed boost.
“Christmas, and the end of the year, are a time when people reflect on the past and try to begin afresh. Manufacturers will hope that the results from this quarters’ survey are a sign that the economy is beginning to grow afresh once more.”
Meanwhile, growth in the economy looks set to improve gradually as long as “Brexit headwinds” are lifted, according to the CBI.
The business group forecasts that economic growth for over the next two years will remain “modest” at 1.3 per cent in 2019 and 1.2 per cent in 2020, picking up to 1.8 per cent in 2021.
But this is based on the assumption that the UK leaves the EU by the end of January 2020 and has “clear line of sight” to an ambitious trade deal, involving alignment with EU rules, said the report.
The main risk to the outlook remains continued Brexit uncertainty, particularly the threat of a no deal, while a further escalation in US-China trade tensions would deliver further hits to world growth and trade, with knock-on impact on the UK economy, said the CBI.