Outlook for UK manufacturers in 2021 clouded by Brexit and Covid-19
A third of UK companies see a difficult landscape ahead for investment in Britain as Brexit comes into full force even as Covid-19 continues to obstruct normal trading.
According to the latest survey by Make UK, only 18% of those businesses asked believe that investment prospects might improve in 2021. In addition, just over a quarter of companies (26%) believed exports to the EU would fall with just 16% believing that they would increase.
There were also fears over the impact on the offer of talented workers for businesses under the new rules governing the country's relationship with the EU.
A third of companies thought the UK’s ability to attract international talent would fall with just 11% believing the UK was set to become a more attractive destination outside the EU.
According to Make UK that might potentially put at risk the ambition of the Government’s new immigration system which was specifically designed to encourage the best talent to come to the UK.
The survey also showed that customs delays were seen as the biggest risk to companies (47%) while concerns over national and local lockdowns due to Covid were the second biggest risk (46%).
Meanwhile, increased costs of regulation were reported as the biggest risk by just under forty per cent (39%) while over one in 10 companies (14%) also believed the relocation of a major customer out of the UK was their biggest risk.
Around a quarter of companies were also looking to re-shore overseas activities.
There were nonetheless some companies that believed the opportunities in 2021 outweighed the risks.
Some UK firms were investing in new products, digital technologies and training to stay attractive to investors and become more agile and productive.
Make UK’s chief executive, Stephen Phipson, said: “The transition to new trading arrangements with the EU was always going to be the biggest challenge facing manufacturers this year and the fact we have an agreement in place doesn’t alter that.”