Manufacturing confidence dip blamed on Brexit stockpiling

The PMI, or Purchasing Managers Index, uses activity within the manufacturing sector that provides an indicator of economic health, examining factors such as new orders, output, employment and stocks.

Respondents are asked to record whether they seek improvements or deteriorations, with the detail being used to inform investment.

Figures released by the CBI show that manufacturing PMI fell 1.4 to 52.8 since December, while orders and employment have also slowed and declined respectively, said Francesco Arcangeli, economist at manufacturers’ organisation the EEF. The fall followed a six month high of 54.2 at the end of 2018.

“Stockpiling activities are at 27-year high with storage of inputs continuing to increase rapidly in preparation for a potential No Deal,” warned Arcanegli.

Manufacturers that invest in the right technologies, can ensure that a competitive edge is maintained

Jason Chester, director of global channel programs, Infinity QS 

He added that declines in Europe for Germany and Italy remained bad news for UK exporters, “with the risk of a cliff-edge Brexit increasing and global trade headwinds brewing, manufacturers will be concerned at the possibility of a perfect storm”.

However, director of global channel programs at Infinity QS Jason Chester said a drop in export prospects fuelled by stockpiling should not blind UK businesses to the need for investment to survive and thrive.

“Manufacturers that invest in the right technologies, can ensure that a competitive edge is maintained, and this will be essential to thrive in a challenging and uncertain economic climate. It also allows them to replace manual processes with a more automated approach, further reducing risks of low-cost labour and talent shortages,” he claimed. 

“While market and economic conditions are outside a manufacturer’s control, investing to mitigate potential risks is absolutely under their direct control.”