MANUFACTURERS’ confidence in the UK economy and in their own business performance has been knocked by the vote to Brexit, according to a new survey today from EEF, the manufacturers’ organisation.

While firms report little immediate impact on trading conditions, the outlook for the next six months shows signs of decline and forecasts now point to the sector remaining in recession until at least the end of 2017.

Looking at the immediate impact, the findings reveal small balances of firms reporting decreases in UK order volumes, EU export order volumes and their enquiry pipeline. Conversely, a balance of two per cent have seen non-EU exports increase.

But more than 80 per cent of manufacturers say their order intake is unchanged or it is too soon to say what the impact has been.

But while the immediate picture looks promisingly steady, demand conditions in the next six months are expected to be weaker.

The survey shows that confidence for the 12 months ahead has tumbled, both in terms of firms’ faith in the UK economy and in their own business performance.

On the other hand opportunities are also seen. Chief of these for manufacturers is the weaker pound, with more than half of firms seeing this as an opportunity.

Taking all of the risks, opportunities and uncertainties into account, 58 per cent of firms say they will be reviewing their UK recruitment and 57 per cent will be reviewing UK investment.

Andy Tuscher, Yorkshire and Humber region director at EEF, said: “Rather than an immediate storm, it is clear that manufacturers see the real risks from the referendum outcome presenting over the next six months to a year. While many are acutely aware that we are still in the early days, exchange rate volatility, political uncertainty and the danger of increased costs are already on their risk radar and subsequently we can already see confidence starting to drain away.”