Brexit was responsible for the drop in UK factory output last month, figures out today showed.
UK manufacturers reported that some of their EU customers are switching to local sources to avoid “post-Brexit trade and transportation complications”, due to trade frictions at the border.
That contributed to weaker demand from Europe, and an overall drop in new export orders fell for the sixteenth consecutive month in May.
Rob Dobson, director at S&P Global Market Intelligence, said: “Manufacturers are finding that any potential boost to production from improving supply chains is being completely negated by weak demand, client destocking and a general shift in spending in the UK away from goods to services.
“These factors are also driving a broad decrease in demand from overseas amid reports of lost orders from the US and mainland Europe.
“The retrenchment in export demand is also being exacerbated by some EU clients switching to more local sourcing to avoid post-Brexit trade complications.”