British factories ramping up Brexit stockpiling, new data shows

Brexit planning boosted the UK manufacturing PMI in December

Brexit planning boosted the UK manufacturing PMI in December

According to the latest snapshot survey from IHS Markit and the Chartered Institute of Procurement and Supply, growing fears of Brexit disruption from border hold-ups after 29 March led more firms to build up safety stocks in December.

"The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers' Index posted 53.8 in December, down from 55.3 in November", IHS Markit said.

"Irish manufacturers experienced a slowdown in growth in December, with PMI data indicating weaker rises in output, new orders and employment", said Amritpal Virdee, an economist at IHS Markit, which compiles the Ireland manufacturing survey.

Underpinning the drop in the headline index was a slowdown in new-order growth among manufacturers to the weakest point in eight months.

Markit's director Rob Dobson said that any "positive impact" of the increase is likely to be "short lived".

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However, there are concerns that a disorderly, no-deal Brexit could disrupt supply chains and therefore delay or even stop production.

Businesses importing goods from the European Union will face severe disruption in the event of a no-deal Brexit.

As a result, inventories rose at the fourth-fastest rate in the survey's 27-year history, and a rise in finished goods stocks in December was the second-strongest since the survey began in 1992.

United Kingdom manufacturers are frantically stockpiling parts ahead of March's Brexit deadline to ensure production is not disrupted by Britain's exit from the European Union.

"The absence of any New Year joy from the European PMI data also confirms that the near future holds a bumpy ride for United Kingdom manufacturers".

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