The UK manufacturing industry continued its downward trend in September, with production falling 3.8% to 122,256 units, according to the latest figures from the Society of Motor Manufacturers & Traders (SMMT).
The figures conclude a turbulent nine months for the sector, with the year-to-date performance down 15.6%. The SMMT attributes the decline to political and economic turmoil, softness in key global markets and operational changes.
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Production for the UK market declined 5.1%, while exports dropped 3.4% as demand appears to be cooling in key global and European markets. Output in the year-to-date, meanwhile, is down 15.6%, marking the weakest first three quarters since 2011 and illustrating the impact of the multiple challenges currently facing the industry.
The SMMT also notes that businesses are having to divert vast resources to prepare for the possibility of a no-deal Brexit – which still remains a threat. British automotive manufacturers have already spent more than £500 million on measures to mitigate leaving the EU without a deal, while essential investment in new products and facilities is having to be put on hold or even cancelled due to the continued uncertainty.
“Another bitterly disappointing month reflects domestic and international market contraction,” said Mike Hawes, chief executive of the SMMT. “Most worrying of all though is the continued threat of a ‘no deal’ Brexit, something which has caused international investment to stall and cost UK operations hundreds of millions of pounds, money that would have better been spent in meeting the technological challenges facing the global industry.
“A general election may ultimately provide some certainty, but does not yet remove the spectre of no deal which will continue to inhibit the UK industry’s prospects unless we can agree and implement a new, ambitious and permanent relationship that safeguards free and frictionless trade.”
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By GlobalDataSeán Kemple, director of sales at Close Brothers Motor Finance, said the figures are another sign of a severely subdued market. “Today should have marked the end of uncertainty. Instead, Brexit negotiations look set to continue for another three months at least.
“This, combined with the rumoured return of the Beast from the East, means it’s not going to be an easy few months for the sector. Now more than ever it’s crucial to pay attention to the changing nature of consumer demand.
