Firms still optimistic of growth

Factories shrug off Brexit impact despite jobs drain

Manufacturers showing resilience, says report

Manufacturers in Scotland are shrugging off the impact of Brexit on their prospects, despite a growing shortage of staff as EU nationals return home.

Of Scottish firms responding to a survey 72% said they had difficulty recruiting employees with the relevant skills.

When asked about the Brexit effect, only 22% (16% UK) cited Brexit concerns and uncertainty over future trading tariffs as a barrier to growth, although 23% had lost, or feared losing staff due to withdrawal from the EU.

Despite being opposed to leaving the EU, a large number “do not appear to be overly concerned by the impact of Brexit”, according to the survey conducted by Henderson Loggie, the MHA association of UK independent accountancy firms and Bank of Scotland.

Two thirds of respondents (65%) are predicting growth over the next twelve months, anticipating it to come from increased demand from customers, expansion of product offering and currency appreciation. 

Gavin Black, manufacturing lead at Henderson Loggie, said Scottish manufacturers are “largely positive in their outlook and prospects for growth” but added: “The sector continues to have difficulty recruiting staff with the relevant skills, the pressure on which is likely to increase as some businesses are at risk of losing staff due to Brexit.

“It is encouraging that the businesses surveyed have ambitions to grow staff numbers over the next 12 months and continue to offer apprenticeships and grow talent from grass roots to try and fill the skills gap.

“The Scottish and UK Governments need to continue to support the sector and expand skills training for the future workforce in schools and colleges.”

Major findings from the report:

Optimism about growth is not reflected in business confidence, with 4% rating their business confidence as high for the next 12 months and 3% rating their business confidence high for the next 36 months

23% have lost or are at risk of losing staff as a result of Brexit

84% expect production costs will continue to rise over the next 12 months

76% invested in R&D in the last year but only 5% of business are spending more than 10% of turnover on R&D

A quarter (21% UK figure) of businesses surveyed received grants in the last twelve months, mainly from Scottish Enterprise

88% view robotics, automation and the Internet of Things as an opportunity to be embraced

In line with the UK picture, 49% of Scottish businesses plan to increase capital investment. 

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