William Anderson Jones, Head of Corporate Dealing (UK) at RationalFX, commented on a survey undertaken by the British Chambers of Commerce/DHL that showed growing concern among manufacturers about exchange rates.
He said: “Since the vote to leave the European Union export volumes to the UK have seen a dramatic increase and manufactures have reaped the benefits from the exchange rate when repatriating profits back into Sterling.
“If recent months and the challengers with the Chequers Agreement and the Salzburg EU heads of State meeting has taught us anything; rocky roads lie ahead. The UK faces a number of uncertainties pre leaving the Bloc on the 29th March 2019, and with that likely volatile currency markets.”
The BCC/DHL survey, of over 2,600 exporters, found that confidence in future operations remains strong, but external economic and political factors are having an impact. The results show 60 per cent of exporting manufacturers were more concerned about exchange rates in the second quarter of the year than in the previous three months. There was also increased concern among 43% of service exporters, highlighting the broad impact of the weakness of the pound.
The findings indicate that price pressures eased slightly on exporters during the second quarter of the year. However, those manufacturers under pressure to raise prices report the cost of raw materials as the leading factor (81%). Service firms believe the cost of raw materials (39%) and other overheads (51%) are the leading sources of cost pressure.
The escalating labour shortage in the UK is also having a serious impact on exporters, with a staggering 69% of recruiting manufacturers struggling to find staff.