Following the release of the UK manufacturing PMI, Chris Barlow, Head of Manufacturing at MHA, says the government needs a new policy with a focus on funding, skills and innovation to support UK manufacturers adjust to Brexit:
“The fall in the index compared to previous months is no surprise; UK manufacturing was artificially boosted in December 2020 because companies took measures to avoid the anticipated Brexit chaos at UK ports. Now Brexit trade friction is starting to bite.
“There is no doubt that the Brexit deal is better than no deal for UK manufacturing, but we are fooling ourselves if we think companies are not experiencing major difficulties as a result of the new red tape. Some companies have ceased trading with the EU altogether because of this (at least temporarily) and are looking for new markets or suppliers.
“As Brexit comes on top of Covid-19 and all its attendant problems, manufacturing firms lack confidence. Many are understandably worried about cashflow and for this reason are holding back new investments. It is time for the government to help the sector with a new industrial strategy.
“UK manufacturing needs a renewed focus on skills and innovation. The government needs a combined policy where additional funding, possibly in the form of R&D relief as well as improved training and apprenticeship schemes go hand in hand with promoting innovation. If this is done quickly and well it should restore confidence and kick-start investment in the sector. If nothing is done, there is more pain to come for UK manufacturers.”