Manufacturers are battling against a “double whammy” as the strong pound constrains exports and fuels a surge in cheap imports, experts have warned.
Rob Dobson, chief economist at financial information firm Markit, said the industry is set to act as a “minor drag” on the country’s growth, as currency weighs on international trade.
Industry data “called into question” expectations of a broad rebound in UK growth in the second quarter of the year, Mr Dobson said. AES, Croda, SIG and Burberry recently warned of the negative impact of sterling’s strength on sales.
AES Engineering said it lost £2.7m on the South African rand, £1.7m on the US dollar, £498,000 on the Brazilian real and £666,000 on the Argentinian and Chilean pesos at its full-year results. Burberry, which has a factory in Castleford, was hit by a £38m adverse exchange rate impact last year.