Exports and investment tumble as manufacturing headwinds stiffen

Produced in partnership with BDO, the survey covered 329 companies from 31 October to 21 November. Uncertainty over Brexit, combined with slowing global growth and a move towards protectionist trade policies, saw the export balance halve from Q3 to Q4 (+24% to +12%). Domestic demand fell less dramatically, slipping from +14% to +11%. According to EEF, anecdotal evidence suggests many companies are stockpiling inventory ahead of the UK’s departure from the EU, which may be artificially inflating the domestic figures. The Q4 collapse in international demand reflects the waning impact of sterling’s devaluation, along with wider global uncertainty.

“There are likely to be a number of causes for the fall in exports this quarter; uncertainty over our future relationship with the EU being the main one,” said Tom Lawton, head of Manufacturing at BDO. “In addition, more subdued global growth, the fading effects of sterling devaluation and the rise of protectionist policies appear to be starting to take their toll on growth.