Brexit worries hinder manufacturing investment
With the Brexit referendum approaching, political and economic uncertainty has intensified. Pension, minimum wage and apprenticeship tax costs continue to rise, coupled with global economic turmoil, forcing British manufacturers to temporarily shelve investment in factories and machinery. It also re-examined its plan to hire more employees. In addition to the number of companies planning to invest falling to a six-year low, capital investment intentions also plummeted to -8%, and there was zero confidence in expanding the scale of the workforce.
The negative sentiment in the British manufacturing industry also prompted the British Engineering Employers Federation (EEF) to further lower its 2016 economic growth forecast to 1.9%. In contrast, the British Office for Budget Responsibility (OBR) )’s GDP forecast reaches 2.4%.
According to the EEF forecast, the UK manufacturing industry will grow by only 0.6% in 2016, which is lower than the previous forecast of 0.8%. In addition, EEF’s latest quarterly report also pointed out that the British steel industry has lost 6,000 jobs in half a year due to the impact of dumping of cheap steel from mainland China. Major steel mills have declared bankruptcy one after another, and the economy is very sluggish.
EEF chief economist Lee Hopley said that although manufacturing orders and output fell, they had improved compared with the previous quarter. Brexit worries hinder manufacturing investment
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