Two-thirds of manufacturers in the UK are fearful a recession will hit the national economy within the next 12 months, a Lloyds Bank survey has revealed.
According to the survey of more than 200 companies, question marks over Brexit and the effects of international trade wars have taken a toll on manufacturer confidence.
“The UK manufacturing sector is truly global so it’s no surprise that the prospect of a trade war between the US and China is on the minds of many,” said Dave Atkinson, head of UK manufacturing at Lloyds Bank Commercial Banking. “53% were concerned about an all-out trade war between the two largest economies. This is a reminder that exporters must closely monitor geopolitical tensions.”
Brexit uncertainty remains the biggest challenge for manufacturers, with 26% crediting it as the biggest concern. A further 41% said a ‘no-deal’ result would have a negative impact on business, compared to 24% who said it would be positive.
Two-thirds said they were worried about the potential effect of currency movements over the next six months, while 55% reported difficulty in hiring skilled staff, up from half at the start of the year.
Only 5% of firms plan to increase staff numbers in the next six months, down from 13%, while only 7% plan to increase investment in the next six months, down from 15%.