A new report has revealed that the nation’s manufacturing firms are becoming more reticent about investing in new technology and premises because of current political uncertainty.
The survey, conducted by the EEF, found that the money pumped into machinery and plant had fallen to 6.5 per cent of turnover.
This was around one per cent less than last year, with the fluctuations in the economy following Brexit understood to account for the fall in expenditure.
The situation is likely to place fresh pressure on ministers to make progress in negotiations with Europe, or else cause further difficulties for the industry.
Lee Hopley, the EEF’s chief economist, said: “With global demand on the up, conditions should be ripe for industry to make new investments in capacity and productivity-enhancing technology, but Brexit means the future outlook for investment is not clear cut.”
The organisation said that the Chancellor, Philip Hammond, should use next month’s Budget to announce measures which may encourage greater investment.
At present speculation is growing as to what steps the Treasury may take, with suggestions that the financial statement may be bolder than many originally assumed.
“Political uncertainty is adding to the hurdles of cost and lack of skills in holding back spending on automation technology,” said Ms Hopley, summarising the current situation.
“The forthcoming Budget can at least start to address the latter of these challenges, starting with an ambitious industrial strategy that tackles barriers to investment head on and ensures UK manufacturers are equipped to compete for the future.”
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