Producers of IT equipment
For the producers of IT equipment, electronic and optical
products, deliveries to the Ukhave a similar level of importance as
in the manufacturing sector as a whole (nearly 4%of sales) .
The country is slightly less important for those sectors which
make mainly intermediate products – chemicals, metal production and processing, and the paper industry (a good 3%of sales) . Since
a certain proportion of intermediate products is exported to an-
other country after further processing, demand from end cus-
tomers, rather than overall British demand, is crucial. These sec-
tors can also therefore benefit from improved international
competitiveness as a result of the weak pound.
The uncertainty surrounding the outcome of the Brexit negotia-
tions is also likely to dampen German investment in the UK. Nearly
11. 5% of all German direct and indirect investment in 2014 was
carried out in the UK – although this was mainly focused on the
provision of financial and insurance services, compared to only
3. 1% or EUR 10. 7bn, for products in the manufacturing sector.
The Ukwas a comparatively important investment location for the
production of measurement, control, and medical equipment, and
watches (Ukproportion: 5. 9%) and of electrical equipment (6. 0%) .
The proportion of foreign direct investment by German investors
in the Ukmanufacturing sector was significantly higher at 7.4%
or EUR17. 6bn, with German mechanical engineering companies in
particular (23. 7%) preferring to invest in locations in the British
Isles.
EU Forecast
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