The “shadow” of a no-deal Brexit has fuelled fears of rising input costs and soaring inflation, according to a new survey by the FDF.
The survey shows more than three quarters (76%) of manufacturers expect input prices to rise in the remainder of the year 2018, whilst 56% expect to see rises in consumer inflation.
Almost a third of businesses expect economic growth to slow in 2018.
The UK’s future relationship with the EU was unsurprisingly a dominant factor when businesses were polled about their key concerns.
Read more: Import costs could lead to higher prices and less choice post Brexit, Arla report warns
Despite this, respondents felt general business confidence had remained static during the last two quarters (66%) and many companies said they were still looking to invest, with investment in new machinery and product launches two of the three opportunities identified by those the FDF spoke to.
It said 54% of businesses had also seen an increase in sales in the UK, while 42% reported an increase in new product launches.
However, more than half of those polled had seen increased ingredient costs (62%), increased packaging costs (61%) and increased energy costs (51%).
“The shadow of a ‘no deal’ Brexit looms large over business confidence amongst the UK’s food and drink manufacturing industry,” said FDF chief executive Ian Wright.
“This should be no surprise: there are so many crucial questions to which businesses need answers.
“Despite this, manufacturers remain resilient. It is encouraging to see so much future investment planned. Now government must start providing the clarity needed to navigate uncharted waters as we look to prepare for our future outside the EU.”
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