Brexit: Confidence Soars at British Factories as Boeing Announces First European Plant for UK

Stephen Brashear/Getty Images
Stephen Brashear/Getty Images

A report from global accountancy and business advice firm BDO indicates that confidence at British factories is soaring in the wake of the Brexit vote, as manufacturing giant Boeing announces the UK will host its first European plant.

Boeing vies for the title of world’s largest aerospace company with Airbus, which already has two manufacturing sites in the UK.

The company will manufacture high-tech aircraft components at a £20 million site in Catcliffe, Rotheram, near the University of Sheffield’s Advanced Manufacturing Research Centre.

Sir Michael Arthur, President of Boeing Europe, said the choice was made because “the area has very high skills, particular[ly] in advanced manufacturing technology, which we think is world class”.

Meanwhile, BDO’s Business Trends Report shows rising confidence and growing domestic order books for Britain’s established manufacturers.

BDO’s optimism index has risen from 102.2 in December to 103.7 – higher than its long-term trend.

The optimism sub-index for manufacturing has increased from 99.4 to 102.2 –  the first growth since June 2015.

The output sub-index, which indicates whether companies expect healthy order books over the next three months, also increased from 97.4 to 97.5.

Beyond manufacturing, the optimism sub-index for services achieved a 14-month high of 103.9, up from 102.7.

Andrea Bishop, lead partner at BDO in Bristol, said: “The UK economy seems to be remarkably resilient. British businesses are surprisingly confident about the short term, encouraged by the opportunities our cheaper currency and a better-performing global economy have created.

“These have provided a much-needed short-term boost for our economy, particularly our manufacturers.

“However, Government still has much to do in these uncertain times if the UK is going to stay on the right economic track.

“The modern industrial strategy could be a step in the right direction. More importantly, simplifying regulation and taxes, and improving our education and training systems are high priorities for businesses in the new economy.

“And with Government borrowing costs still close to all-time lows, the opportunity to replace our worn out infrastructure is still an enticing one.”

Prior to Britain’s referendum on membership of the European Union (EU) virtually every established global and national forecaster predicted that a Leave vote would result in what the Treasury described as an “immediate and profound shock” to the UK economy.

There has been no such impact, and, in a substantial blow to the prestige of the forecasting institutions and the hopes of the “Remain resistance” led by former Prime Minister Tony Blair and millionaire financier Gina Miller, the average growth forecast since referendum day has tripled.

Follow Jack Montgomery on Twitter: @JackBMontgomery