EEF's Autumn Statement 2016 submission

PUBLISHED 16 Nov 2016

The decision to leave the EU has left the UK economy facing a wave of fresh economic and political challenges. Uncertainty surrounding the UK’s future relationship with the EU is weighing heavily on businesses’ confidence to invest and recruit new staff. Investment decisions in some significant businesses, employing many thousands of people through complex supply chains, await clear signals about the Government’s Brexit strategy and the outcome of negotiations with the EU.

Meanwhile global economic growth is anaemic and geopolitical challenges are mounting throughout the developed and developing world. The UK’s manufacturing sector is not shielded from significant headwinds. It is highly trade-intensive and deeply integrated into global manufacturing supply chains.

EEF survey data in the immediate aftermath of the EU referendum suggested that confidence in the sector and performance expectations plunged on the back of the vote to leave the EU.

Now that the dust has settled, confidence in the sector has corrected and activity levels have somewhat stabilised, albeit they remain subdued. Manufacturers are carrying on with existing business plans and eyeing new growth opportunities, particularly in overseas markets, where the depreciation in the pound has supported a boost in export competitiveness. Their business ambitions over the next few years to grow, export, innovate and adopt new technologies also appear to be in place.

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