UK manufacturers optimistic for 2018 despite Brexit worries

According to EEF/AIG's executive survey, the country's manufacturers are entering 2018 in the most optimistic mood about the global economic outlook since 2014, albeit amid a rising balance of companies who see more risks than opportunities.

Commenting on the results of the survey, EEF boss, Stephen Phipson, said: "Chief amongst these [challenges] is Brexit which has put the investment outlook on a knife edge. As such, it is essential that the Government gets a transition deal as a matter of urgency and sets out with utmost clarity as to what kind of final deal it is looking for.

"In tandem with this it also needs to crack on a pace with its Industrial Strategy. This will be vital in providing manufacturers with the confidence to invest in strategies to improve their productivity and enter new markets."

Significantly, according to the business lobby group 48% of manufacturers continued to believe the UK is a good location for their manufacturing activities.

However, 26% of the firms which participated saw more challenges than opportunities looming ahead in the coming year, up from 23% in 2017, and twice the proportion that saw the opposite.

Standing out amongst the hurdles which Brexit might throw up were the effects it could have on manufacturing companies as a result of sterling volatility and rising costs, together with an increased risk of cyber-attacks.

Nevertheless, 62% of companies were predicting growth in the domestic market.

Even so, responses were not so positive when discussing growth prospects for the UK economy.

"The optimism for the global economy contrasts, however, with the outlook for the UK market with more manufacturers expecting a deterioration in the UK economic conditions for the second year running," EEF said in a statement.

On a more positive note, exports were expected to fare well, thanks to the growing global economy and the weakened pound, with 47% and 51% of companies expecting higher orders from EU and non-EU customers, respectively.

Also, half of those manufacturers surveyed were planning on increasing their workforce and only 7% on reducing it, although with Brexit forcing a potential loss of migrant workers the vacancies could be hard to fill.

Phipson added: "Everything in the 2018 garden is not rosy, as there are plenty of factors that could puncture this positive picture."