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 thirteen per cent of companies are holding off investment altogether until there is further clarity on a Brexit deal.
The survey’s findings are backed up by international data, which shows that the UK lags behind its European counterparts in investment in machinery and robots.
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.
EEF’s chief economist Lee Hopley called on government to put investment and productivity at the forefront in the forthcoming Budget statement.
“Political uncertainty is adding to the hurdles of cost and lack of skills in holding back spending on automation technology,” she said. “The forthcoming Budget can at least start to address the latter of these challenges, starting with an ambitious industrial strategy that tackles barriers to investment head on and ensures UK manufacturers are equipped to compete for the future.”
EEF’s findings are echoed by the CBI’s latest quarterly industrial trends survey, which shows that growth in manufacturing activity has softened in the three months to October and that expectations for spending on new equipment has weakened. The report also points to increasing concern over labour shortages.
Both surveys are published in the same week that EEF has reportedly joined forces with a number of business groups including CBI, The Institute of Directors, The Federation of Small Businesses and the British Chambers of Commerce to warn Brexit secretary David Davis that failure to secure a transitional deal with the EU that closely mirrors the existing relationship will risk UK jobs and investment.
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