UK manufacturers prepared for Brexit by stockpiling raw materials at a record pace last month, a closely-watched survey has suggested.
The research, by IHS Markit/CIPS, found companies were stockpiling goods in January at the fastest pace in the survey’s 27-year history.
Employment in the sector fell, and the survey warned that export orders were “near-stagnant”.
It added that there was a risk of the sector slipping into recession.
Overall, the survey’s Purchasing Managers’ Index fell to 52.8 last month from 54.2 in December, which was a three-month low and the second weakest reading since July 2016.
While the figure above 50 still implies activity in the sector is expanding, IHS Markit/CIPS said manufacturing had made a “lacklustre” start to the year.
With two months to go until the UK is due to leave the EU, the lack of clarity over the terms of the UK’s departure means firms are having to make contingency plans.
“The start of 2019 saw UK manufacturers continue their preparations for Brexit,” said Rob Dobson, director at IHS Markit.
“Stocks of inputs increased at the sharpest pace in the 27-year history, as buying activity was stepped up to mitigate against potential supply-chain disruptions in coming months.
“There were also signs that inventories of finished goods were being bolstered to ensure warehouses are well stocked to meet ongoing contractual obligations.”
