LONDON (Reuters) – Small and medium-sized British factories are braced for the worst profits outlook in at least nine years, according to a survey on Tuesday that showed companies putting investment plans on ice ahead of Brexit.
Fifty-two percent of manufacturers expect Brexit to be detrimental to their business, the quarterly National Manufacturing Barometer from consultancies SWMAS and Economic Growth Solutions showed.
Out of this, 17 percent said they thought leaving the European Union could challenge their own survival.
The survey is the second report in the space of a few days to show the outlook for manufacturing souring ahead of Brexit in March next year.
Prime Minister Theresa May faces opposition to her Brexit plan from within her own Conservative Party while and has also failed so far to reach agreement with other EU leaders, raising fears that Britain could leave the EU without a transition deal.
Tuesday’s survey showed only 39 percent of manufacturers expect profits to increase over the next six months and 24 percent forecast an outright drop — the weakest outlook since the National Manufacturing Barometer started in 2009.
“What we are clearly witnessing is manufacturers putting the brakes on new investments and recruitment whilst some enter survival mode caused by ongoing Brexit uncertainties,” Simon Howes, managing director of SWMAS, said.
The survey showed smaller manufacturers had started to stockpile raw materials, as well as finished goods to a lesser extent.
Twenty-three percent of manufacturers said they were cautiously optimistic about the impact of Brexit on their business, while 13 percent said they were confident.
Plans to deal with Brexit were slanted more towards reducing risks than seizing opportunities, the survey showed.
More than 400 manufacturing executives participated in the National Manufacturing Barometer during October.
(Reporting by Andy Bruce, editing by David Milliken)