Businesses take stock as uncertainty goes on

In his monthly column, Professor Frank Peck, of the University of Cumbria's Centre for Regional Economic Development, looks at how growth has been boosted by firms stockpiling ahead of the original Brexit date in March and how that may harm longer term productivity. As we enter June, the one certainty faced by business is the reality of continued political uncertainty regarding the UK’s future relationship with Europe. It is now clear that many businesses have developed strategies to manage the risks and we have seen evidence of this in the first quarter of 2019. Growth figures for January to March, announced in May, showed that the economy grew by 1.8 per cent compared to the same quarter in the previous year, its fastest rate of growth since quarter three of 2017. Closer inspection of this data shows manufacturing output, in particular, up by 2.2 per cent on the previous quarter compared with much slower growth in services of only 0.3 per cent. This stronger performance in manufacturing has been attributed in part to the effects of contingency plans of manufacturing companies leading up to the end of March 2019.