Just 23% of manufacturers expected opportunities to outnumber risks, according to EEF’s annual Executive Survey found.
Nearly half (47%) were expecting the economic conditions to deteriorate over the year ahead.
Three-quarters of firms (74%) expected fluctuating exchange rates to be a risk this year, while 66% said rising input costs would impact their business. Almost half said they were concerned about volatility in other major markets.
‘Smooth journey is far from guaranteed’
EEF ceo Terry Scuoler said: “A smooth journey is far from guaranteed [this year], but firms are strongly attuned to the challenges and remain fully focused and determined to deliver on their long-term plans for growth.
“In many ways 2017 is likely to be another unprecedented year of change and uncertainty, but the UK manufacturing sector remains ambitious, resilient and adaptable.”
More than 40% of manufacturers were making strong efforts to break into new export markets as a response to Brexit threats, the survey also revealed. This followed environment secretary Andrea Leadsom’s call for food and drink manufacturers to export more products to China last month.
Improving brand marketing and developing new products were also areas that manufacturers were targeting to reduce Brexit risks – including increased raw material import costs, and loss of access to the EU’s 500M consumers.
‘Unprecedented year of change’
Scuoler said that long-term planning was key to the manufacturing industry navigating through an “unprecedented year of change”.
“With a new digitally-driven industrial era on the horizon and everything to play for, this long-term vision and focus is vital – despite the peaks and troughs manufacturers cannot afford to be diverted away from where they need to be.”
Despite Brexit’s potential threats, 61% of manufacturers believed the UK was a competitive location for manufacturing – 5% up on last year’s survey. Just 13% thought the UK wasn’t competitive for manufacturing – 18% lower than 2016.
Meanwhile, Arla Foods’s md Tomas Pietrangeli called for the food and farming industries to work together last week, to protect themselves against Brexit threats.
EEF Executive Survey – at a glance
- 46% said their firms faced more risks than opportunities in 2017
- 47% expected UK economic condition to decline
- 74% feared exchange rate volatility would impact their firms