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UK factories are cutting investment amid Brexit uncertainty
REUTERS/Francois Lenoir
Brexit-related uncertainty is weakening long-term investment among UK manufacturers, says a new report.
"With global demand on the up, conditions should be ripe for industry to make new investments ... but Brexit means the future outlook for investment is not clear-cut," said the EEF's Lee Hopley.
LONDON — Mounting political uncertainty surrounding Brexit is damaging confidence and weakening long-term investment among manufacturers, according to a report by manufacturing association EEF and Santander cited by Reuters.
Investment in plant and machinery has dropped to 6.5% of turnover over the last two years, down from 7.5% last year, said the report, citing an August survey of 328 companies.
EEF economist Lee Hopley said conditions should "ripe" for growing investment given he backdrop of surging global demand.
"With global demand on the up, conditions should be ripe for industry to make new investments in capacity and productivity enhancing technology. But Brexit means the future outlook for investment is not clear cut," EEF economist Lee Hopley said.
Just one-third of survey respondents said uncertainty surrounding Britain's troubled Brexit negotiations has had no impact on plans.
It came as five leading business groups wrote a letter to Brexit secretary David Davis calling on the government to secure "urgent agreement on transition arrangements ... as soon as possible."
The letter, obtained by Sky News, said: "Agreement [on a transition] is needed as soon as possible, as companies are preparing to make serious decisions at the start of 2018, which will have consequences for jobs and investment in the UK."
Negotiations between the UK and EU have moved slowly since they began earlier this year, meaning a potentially ruinous "no deal" scenario is increasingly likely.
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