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Post-Brexit manufacturing downturn 'unlikely to last beyond 2016'

Published 05/09/2016

Manufacturing output and orders are expected to improve in the coming months
Manufacturing output and orders are expected to improve in the coming months

Manufacturing output went into reverse in the last three months, with growth not expected to return until the end of the year, a study has shown.

Research by industry body the EEF revealed that confidence among firms about future prospects for the economy have taken a knock.

Exports were more positive on the back of stronger demand from the EU and United States, the manufacturers' group said.

Output and orders are expected to improve in the coming months.

Chief economist at EEF Lee Hopley said: "Manufacturers' confidence collapsed in the aftermath of the EU referendum, but our latest survey provides some relief that this has corrected."

Ms Hopley added: "Signs of an export revival are helping to drive more optimism about activity in the second half of the year, but concerns about whether the UK economy can shrug off post-referendum challenges is clearly evident.

"These risks are expected to hit some sectors, such as with industries linked to investment goods and construction, harder than others. Despite the short-term outlook for manufacturing remaining broadly stable, the continued downward slide in investment plans should keep policymakers alive to the potential risks facing the sector."

Tom Lawton, of BDO Manufacturing, which helped with the study, added: "While the outlook for the UK economy remains uncertain, manufacturers are more confident about their own business performance. This shows they believe there is a positive way forward from here and that Brexit might not have been the portent of recession."

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