UK political uncertainty, particularly around Brexit, has dented British manufacturing’s appetite to invest in new plant and machinery, according to a study published by EEF and Santander. The EEF/Santander Annual Investment Monitor – which is based on discussions with 328 companies – claims that while demand conditions should be spurring on investment just one third of companies say that Brexit has had no impact on their plans. A similar proportion are only investing to satisfy current plans and waiting for clarity on any deal before investing further, while at the other end of the spectrum 13% of companies are holding off investment altogether until there is further clarity on a Brexit deal.
The survey’s spotlight on investment in automation shows that industry is making only slow progress on automating manufacturing processes, with industry being held back not just by caution but also by challenges from the cost of technology, uncertainty about returns and the capability to successfully implement change.
Similar findings by the CBI’s latest quarterly industrial trends survey shows that expectations for spending on new equipment has weakened. Their report also points to increasing concerns over labour shortages.