Market Research News

UK Manufacturing Contracts Rapidly After Brexit

  • August 1, 2016
  • By Rajesh Namase
  • 0

UK Manufacturing contracts after Brexit. July saw UK manufacturing contract at its fastest rate since 2013. According to a survey carried out by the The Markit/CIPS manufacturing purchasing managers’ index UK manufacturing fell by 48.2%. The level of 50% indicates parity, with less than 50% indicating a fall. The result of this survey increased concerns that the Brexit vote would have negative effect on UK manufacturing.

This is the result of a survey of 600 manufacturing companies in the UK, and covers most aspects of an industrial company such as orders, employment, inventory, production and deliveries/delivery times. According to a senior economist at Markit, Rob Dobson, the survey was carried out during a period of widespread reports that the UK people’s decision to leave the European Union had adversely affected business activity.

UK Manufacturing Contracts

UK Exports to The Commonwealth

Whether this is the case or not remains to be seen, because such reactions may be just temporary reactions to what many businesses felt would have negative repercussions on their business. Others believed that the EU was holding them back, and can now export more to countries outside the EU, such the British Commonwealth countries. Some of these, such as Australia, are already welcoming more trade with the UK.

Recent figures have indicated that the UK economy grew by 0.6% April to June, though most of this was in April. According to Market Beck, EY Club senior economic advisor, “There was little consolation from the detail of July’s survey. Output contracted across the consumer, intermediate and investment goods sectors.  Still, some UK manufacturing firms are reporting increased orders from outside of the EU.

UK Manufacturing Contracts but Government Confident

He went on to comment that export orders had increased, though no doubt that was influenced by the weaker pound. Business confidence has weakened considerably since the vote. However it is early days, and there are many knee-jerk reactions to the vote.

Time will tell, and the UK government is confident of the future, and already making trade agreements with countries outside the EU. It should be noted that the UK is still an EU member, and may continue so for another two years. UK manufacturing is still essential to many world markets and it meets many needs.

About Rajesh Namase

Rajesh Namase is a technology enthusiast, online marketer and SEO. He specializes in online marketing (SEO, SEM, Social Media, Content Markting, Email Marketing). Apart from that, he loves to blog about technology on TechLila.