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You can find the current article at its original source at http://www.theguardian.com/business/2018/sep/24/fears-of-no-deal-brexit-push-british-export-orders-close-to-year-low
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| Fears of no-deal Brexit push British export orders close to year low | Fears of no-deal Brexit push British export orders close to year low |
| (35 minutes later) | |
| Britain’s manufacturers have warned of the mounting risk of a no-deal Brexit as export orders dropped to the lowest level in almost a year. | Britain’s manufacturers have warned of the mounting risk of a no-deal Brexit as export orders dropped to the lowest level in almost a year. |
| The CBI industrial trends survey, which gauges manufacturing activity across the UK, revealed slowing economic output for the three months to September, with company export orders the lowest since October 2017. | The CBI industrial trends survey, which gauges manufacturing activity across the UK, revealed slowing economic output for the three months to September, with company export orders the lowest since October 2017. |
| Anna Leach, head of economic intelligence at the CBI, said that factory order books remained strong and output was still growing, but that “Brexit uncertainty continues to cloud the outlook”. | |
| “Heightened fears of a ‘no-deal’ Brexit scenario have prompted some firms to move publicly from contingency planning to action,” she said. | “Heightened fears of a ‘no-deal’ Brexit scenario have prompted some firms to move publicly from contingency planning to action,” she said. |
| Companies were put on notice last week that Britain could crash out of the EU in little more than six months, after Theresa May failed to win support for her Brexit plan from EU leaders in the latest round of talks. | |
| Failure to reach a deal with Brussels could force the UK and EU to resort to trading on World Trade Organization rules after Brexit, with the potential introduction of import tariffs and other barriers to trade from the end of March. The price of buying components from overseas could increase, while exports would also become more expensive for foreign buyers. | |
| The latest snapshot from the CBI showed 20% of manufacturers reported total order books to be above normal, and 20% said they were below normal. When both figures are rounded they give a balance of -1%. | The latest snapshot from the CBI showed 20% of manufacturers reported total order books to be above normal, and 20% said they were below normal. When both figures are rounded they give a balance of -1%. |
| The survey of 409 manufacturers showed a balance of only 5% said that export orders were above normal, which is the lowest balance since October last year. | The survey of 409 manufacturers showed a balance of only 5% said that export orders were above normal, which is the lowest balance since October last year. |
| British manufacturers have found support for their products overseas from a weaker pound since the EU referendum, alongside robust global economic conditions lifting demand for merchandise around the world. Sterling has dropped further against the dollar in recent months amid growing fears over no-deal Brexit. | British manufacturers have found support for their products overseas from a weaker pound since the EU referendum, alongside robust global economic conditions lifting demand for merchandise around the world. Sterling has dropped further against the dollar in recent months amid growing fears over no-deal Brexit. |
| Despite the risks to the economy, the CBI found output expanded in 10 out of 17 manufacturing sectors, with growth driven by the mechanical engineering, food, drink and tobacco, plastic products, and metal products sectors. Manufacturers said they also expect output growth to pick up over the next three months, while warning of the risk from Brexit. | Despite the risks to the economy, the CBI found output expanded in 10 out of 17 manufacturing sectors, with growth driven by the mechanical engineering, food, drink and tobacco, plastic products, and metal products sectors. Manufacturers said they also expect output growth to pick up over the next three months, while warning of the risk from Brexit. |
| Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said the latest reading from the CBI survey suggests the manufacturing sector could grow by 2% this year compared to 2017. However, he warned overseas customers were likely to move away from UK suppliers “with every day that passes without a Brexit deal”. | Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said the latest reading from the CBI survey suggests the manufacturing sector could grow by 2% this year compared to 2017. However, he warned overseas customers were likely to move away from UK suppliers “with every day that passes without a Brexit deal”. |
| “As a result, we doubt that the manufacturing sector’s recovery is about to get back on track,” he said. | “As a result, we doubt that the manufacturing sector’s recovery is about to get back on track,” he said. |
| Economists argue that Britain has been unable to take full advantage of the tailwinds that should support manufacturing activity because of the lack of clarity over the future trading relationship with the EU. The Bank of England also warned businesses have put investment decisions on hold or diverted activity to other nations. | Economists argue that Britain has been unable to take full advantage of the tailwinds that should support manufacturing activity because of the lack of clarity over the future trading relationship with the EU. The Bank of England also warned businesses have put investment decisions on hold or diverted activity to other nations. |
| The CBI said it expected UK manufacturers would continue benefiting from overseas demand and the lower sterling exchange rate in the near future, but that overall economic growth would remain subdued, reflecting weak household income growth across the country and the drag on investment from Brexit uncertainty. | The CBI said it expected UK manufacturers would continue benefiting from overseas demand and the lower sterling exchange rate in the near future, but that overall economic growth would remain subdued, reflecting weak household income growth across the country and the drag on investment from Brexit uncertainty. |
| Tom Crotty, chair of the CBI manufacturing council and group director of Ineos, the UK chemicals firm led by Brexit supporter Jim Ratcliffe, said the government needed to prioritise the protection of frictionless trade with the EU. | Tom Crotty, chair of the CBI manufacturing council and group director of Ineos, the UK chemicals firm led by Brexit supporter Jim Ratcliffe, said the government needed to prioritise the protection of frictionless trade with the EU. |
| “Robust output volumes and order books are good news for British manufacturers, who have benefited from a healthy global economy and lower sterling exchange rate. | “Robust output volumes and order books are good news for British manufacturers, who have benefited from a healthy global economy and lower sterling exchange rate. |
| “However, the continued uncertainty surrounding the final six months of Brexit negotiations presents a real risk to the continuation of this strong momentum,” he said. | “However, the continued uncertainty surrounding the final six months of Brexit negotiations presents a real risk to the continuation of this strong momentum,” he said. |
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