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Brexit stockpiling by manufacturers hits record high

Lianna Brinded
Head of Yahoo Finance UK
Photo: Reuters

The manufacturing sector is the latest in a long line of industries that are ramping up their stockpiling of goods in order to prepare for Brexit.

According to the IHS Markit/CIPS Purchasing Managers’ Index, manufacturers boosted their stockpiles at the fastest pace since the survey began 27 years ago. A score of 50 or above on the index signifies growth. In January, Britain’s PMI score fell to 52.8, down from 54.2 in December.

“The start of 2019 saw UK manufacturers continue their preparations for Brexit. Stocks of inputs increased at the sharpest pace in the 27-year history, as buying activity was stepped up to mitigate against potential supply-chain disruptions in coming months,” IHS Markit director Rob Dobson said in a statement.

“There were also signs that inventories of finished goods were being bolstered to ensure warehouses are well stocked to meet ongoing contractual obligations.”

The Institute of Directors (IoD) said in a survey released Friday that Brexit has prompted almost a third of British companies to move some operations abroad or at least consider it.

The Society of Motor Manufacturers and Traders (SMMT) put the UK auto industry on “red alert” on Thursday after investment in the sector almost halved in 2018. The trade group also cited the growing threat of a no-deal Brexit.

“With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert. Brexit uncertainty has already done enormous damage to output, investment and jobs,” SMMT CEO Mike Hawes said.

“Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the European Union but with the many other global markets with which we currently trade freely.”

READ MORE: UK auto industry on ‘red alert’ amid growing no-deal Brexit threat