UK manufacturers optimistic about 2022 despite Brexit and inflation

© Reuters. FILE PHOTO: Smoke rises at sunset at a factory in Rugby, England, on February 10, 2021. Reuters/Matthew Childs

LONDON (Reuters) – British manufacturers are optimistic that business conditions and productivity will improve this year, although a majority say British manufacturers have been hit by Brexit and rising costs, an industry survey showed on Monday. .

Trade body Make UK and accountancy firm PricewaterhouseCoopers said 73% of manufacturers believe conditions in the industry will improve, with 78% expecting at least a modest increase in productivity by 2022.

But two-thirds of companies said Brexit had hampered their business in the nearly two years since Britain left the European Union, while retaining staff and rising input costs related to inflation posed challenges.

Stephen Phipson, chief executive of Make UK, said: “This is a testament to the strength of manufacturers who have emerged from the turmoil of the past few years and are in a relatively strong position.”

“To build on this, we now need to see a government fully committed to supporting the industry,” he said, adding that the government needed to take a longer-term view of the economy.

Amid supply chain shortages related to Brexit and the pandemic last year, more than a third of respondents said they would move some of their operations ashore in the next two years, while just over half said they would There are no plans to move any production back to the UK. UK.

A similar survey showed that British manufacturers raised prices last month to the highest level in at least two decades, as the Bank of England raised interest rates to 0.25% to help ease inflationary pressures.

UK manufacturing output remained more than 2% below pre-pandemic levels in October, official data showed.

Make UK forecasts a 6.9% growth in manufacturing in 2021 and a 3.3% increase in 2022.

The survey of 228 companies was conducted between Nov. 8 and Nov. 29.

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