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The UK manufacturing industry is experiencing a shift in growth markets, with the US no longer in the top three for the first time in nearly 40 years. This change is attributed to higher tariffs impacting export expectations.
A recent survey by manufacturers association Make UK revealed that only 18% of British manufacturers anticipate positive demand conditions in the US, compared to 56% for Europe, 23% for the Middle East, and 20% for Asia. This marks a significant departure from previous trends, as the US has historically been a key market for UK exports.
The decline in UK exports to the US in April, following a series of consecutive monthly increases, underscores the challenges faced by businesses in navigating trade uncertainties. Seamus Nevin, chief economist at Make UK, highlighted the mounting uncertainty in major markets as a growing concern for manufacturers.
The survey, which included 324 companies and was conducted between April 30 and May 22, coincided with the announcement of a trade agreement between the UK and the US. While the deal aimed to reduce tariffs on certain exports, challenges remain due to the ongoing 10% levy on most goods.
Make UK also emphasized the need for the government to address the high cost of energy in its industrial strategy to support the manufacturing sector. Despite some improvements in manufacturing orders and output, investment intentions for the year ahead remain subdued.
Richard Austin, head of manufacturing at BDO, emphasized the challenging landscape for British manufacturers and the need for clarity and targeted investment from the government to sustain the industry’s recovery.