CBI has reported some signs of Brexit recovery, but growth is expected to fall to a four-year low.
According to the latest quarterly CBI Industrial Trends Survey, manufacturing output and domestic orders saw firm growth since the beginning of 2016, but this will likely fall between now and November.
The end of 2015 saw a slow-down in activity, but a survey of 506 manufacturers proves that the sector had enjoyed a strong recover up until July. Output, domestic order numbers, and employment all improved; export orders were flat, but still an improvement on the previous survey.
However, optimism has given way to wariness in response to the referendum results. Expectations for growth are at their lowest since the start of 2012, with output and staff expected to fall.
There are concerns over the limbo state of Britain and the EU, but competitiveness in international markets has improved apace, and as such export orders are likely to rise.
Rain Newton-Smith, CBI Chief Economist, said: “Manufacturers picked up the pace over the second quarter, with output growing solidly. We’re also seeing encouraging signs of a boost to export competitiveness from a weaker sterling.
“But it’s clear that a cloud of uncertainty is hovering over industry, post-Brexit. We see this in weak expectations for new orders, a sharp fall in optimism and a scaling back of investment plans.
“So, it’s important now for the new Government to steady the ship with a plan, and a clear timetable, for negotiating the UK’s relationship with the EU. This, along with a renewed focus on industrial strategy, will help give firms the confidence they need to grow and create jobs.
“Manufacturers look forward to working with the new Government to preserve the openness of the UK’s economy to markets, skills and trade.”