The right investment decision?
Be bold or stay safe? The manufacturer’s dilemma.
The EEF/Santander 2016 investment monitor was released a couple of weeks ago. Commissioned to assess investment plans and the impact of Brexit. The report is designed to monitor the mood of the manufacturing community. In a time of political uncertainty, what is the right investment decision, what will manufacturers do? Be bold or stay safe?
On the one hand, staying safe may seem like the clear choice. Why invest heavily in new services or facilities when trade deals may alter and affect exports. The economy might take a dip and we could face a similar situation to 2007? As cited by The Business Desk, the survey revealed that 43% of manufacturers have cited order book uncertainly as the main reason that they aren’t increasing investment in 2016 (up from just 21% last year).
It can be argued that now is not the time to play it safe and decreasing investment is actually a risky strategy. If the UK manufacturing sector stops investing they will fall behind in the global race to remain competitive at a crucial moment. We need to be showcasing our skills and what the British manufacturing sector can offer to the world. Now is in actual fact a time to be bold and confident in our economy. Equally, it could be a critical time to take hold of new and emerging opportunities. Those brave enough to take hold of these new opportunities can be rewarded with new customers and increased sales.
As Charlotte Horobin, Interim Director for EEF West Midlands Region said to the Business Desk recently “Fears of an immediate collapse in business investment appear to be unfounded for now.” and with the pound dropping against the Euro and the Dollar, British exporters are more competitively priced. For the short term, the picture for the U.K. manufacturing base looks good so it’s likely that it will only be in the medium term that we really start to understand whether the right decision really was to be bold or to stay safe.
What are your business plans for investment? Are you staying safe or making bold plans to capitalise?