FRANKFURT (Reuters) – German engineering association VDMA expects the British market to stagnate next year as manufacturers hold off investments in factory equipment while they wait for a degree of clarity in Brexit negotiations.
The market is likely to grow by 1 percent in 2018, “if at all”, VDMA Executive Director Thilo Brodtmann told a news conference on Tuesday, following expected growth of 5 percent this year.
German engineering exports to Britain fell 4.5 percent in the first nine months of 2017, and the VDMA expects additional costs of 180 million euros ($212 million) a year for its members if Britain leaves the customs union.
“What we’re seeing there is a perfect storm,” said VDMA President Carl Martin Welcker. “I don’t see that the Brits are preparing properly.”
He cited issues ranging from traffic jams at ports to technical standards for equipment piling on top of the pure financial considerations and investment uncertainty created by Britain’s decision to leave the European Union.
Reporting by Georgina Prodhan; Editing by Maria Sheahan