LONDON Jan 9 British factory bosses are
downbeat about the outlook for the economy after last year's
Brexit vote even though they expect their sales both at home and
abroad to improve in 2017, an industry survey showed on Monday.
An annual survey by manufacturing association EEF showed 47
percent of executives in the sector predicted a decline in
Britain's economic fortunes this year, up from 28 percent in the
same survey in 2016.
Only 25 percent said they expected to see an improvement.
Still, manufacturers were confident they would perform well
in the face of uncertainty around Brexit, with half expecting to
increase their sales at home and more than 40 percent
anticipating improved export sales.
British manufacturing had a mixed performance in 2016, with
economic growth driven mostly by the much larger services sector
and consumer spending.
A separate survey from credit card company Visa Europe
showed consumer spending expanded at an annual rate of 2.8
percent in the fourth quarter - more than double the pace of the
previous two quarters.
However, consumer spending power looks likely to wilt in the
face of rising inflation following the pound's post-Brexit vote
drop - something that two-thirds of manufacturers in the EEF
survey cited as a big risk.
Last week a record number of manufacturers in a British
Chambers of Commerce survey - the largest of its kind - said
they expected to hike selling prices in the coming months.
"Global political upheaval means that 2017 looks set to be
another bumpy ride, with manufacturers forced to navigate
uncertainty, unpredictable economic conditions and a number of
risks that have been amplified by Brexit," said Terry Scuoler,
chief executive of EEF.
Britain's economy looks on track to have expanded by more
than 2 percent in 2016 - faster than almost all other big
advanced economies except perhaps the United States.
Economists polled by Reuters expect Britain's growth rate to
more than halve in 2017 to 1.1 percent.
EEF conducted its survey of 281 manufacturing executives
between Nov. 2 and Nov. 23.
(Reporting by Andy Bruce; Editing by William Schomberg)