Speaking on BBC Radio Scotland recently about the situation affecting the engineering industry in Scotland, Bryan Buchan, CEO of Scottish Engineering explained how the current levels of uncertainty were curtailing the industry.
“The Referendum vote is just another tranche of uncertainty and probably even more severe than those that have preceded it”, Mr Buchan explained. “We are not seeing the type of investment we would expect to see in terms of capital equipment, and I think one of the major concerns now will be how do we attract inward investment when we are outwith the EU”, he added.
Speaking further on the investment situation, he explained how investment was drying up in the short term and that companies have been marking time from pre-Scottish referendum through the UK elections, and now the Brexit vote will also apply.
Mr Buchan said that Scotland’s manufacturing sector exports some 42% of its production to the EU making it an extremely important market, though it had contracted somewhat from 54% in 2002 to the 42% at the end of 2014. Now emerging markets, he said, like India would be the targets for companies in the immediate future, but he did put a caveat on these activities being really successful, because a number of potential markets like Brazil had put on a range of tariffs making it extremely difficult to export.
He concluded by saying that the fall in the value of the pound would help exports by reducing our relative costs and adding to the value of receipts in Euros, while at the same time increasing the cost of goods brought in to Scotland and the UK.
Bryan Buchan, CEO, Scottish Engineering, speaking on BBC Radio Scotland, Tue 28 June 2016.