Uncertainty regarding the outcome of the forthcoming EU referendum and concerns over a possible Brexit is having a detrimental impact on the business performance of more than a third of UK manufacturers, according to a new survey.
Responding to a special question added to the May Markit/CIPS UK Manufacturing PMI survey, some 27% of the more than 420 companies polled indicated that the UK’s potential exit from the European Union (Brexit) was having a ‘detrimental’ effect on their business.
While a further 8% revealed that the impact was ‘strongly detrimental’.
Conversely, just 3% reported a ‘beneficial’ impact, while around 1% indicated a ‘strongly beneficial’ effect. More than half (51%) noted no significant impact.
Regards the types of difficulties manufacturers were facing, nearly a quarter of respondents commented that Brexit ‘uncertainty’ was making it difficult to make business decisions; which in turn was adversely impacting on their sales.
At 30%, costs were also being adversely affected, with a similar proportion also highlighting a detrimental impact on profits. Investment and planning decisions were also being hampered.
You can read more about the latest Markit/CIPS UK Manufacturing PMI survey, with industry commentary, here.
In stark contrast, nearly 80% of those surveyed reported no significant effect arising from uncertainty over Brexit and their ability to hire suitable staff.
The latest Markit/CIPS UK Manufacturing PMI (May 2016) indicated that UK manufacturing had edged back into the black – creeping over the neutral growth mark of 50.0.
Though with a score of just 50.1, UK manufacturing has continued its “generally lacklustre” start to the year.
The previous PMI (April), saw figures dip below the critical no-change gauge of 50.0 for the first time in more than three years. The score of 49.2 was chalked up to a decline across both production and new orders.
CEO at the Chartered Institute of Procurement & Supply (CIPS), David Noble noted: “It is likely some manufacturers are maintaining a financial shield as a barrier against the uncertainties still affecting the sector, including those arising from the forthcoming EU referendum.”