PracticeConsultingManufacturers still cautious about euro

Manufacturers still cautious about euro

Two-thirds of manufacturing and engineering firms are still uncertain about joining the single currency, according to a new survey released today.

The survey of 500 companies belonging to the Engineering Employers Federation found that just one five of them favoured joining the euro, without reservation, despite the fact that 80% of them currently export their goods to the EU.

One third of companies said Britain should adopt a ‘wait-and-see’ approach before making a commitment, while 29% supported joining the euro, but remained opposed to setting a timetable for discarding the pound.

Only 8% of companies believed Britain should never join the euro, while a further 6% said it should not happen before 2007.

A significant strengthening in the euro is likely to increase support for its introduction to almost 60% of UK industries, the survey found, and 56% of companies said they would support the single currency if measures were introduced to cut back the involvement of the EU in national affairs such as taxation and social policy.

Billing the survey as the last before the imminent general election, EEF director-general Martin Temple said businesses remained committed to the European Union, but warned: ‘Opinion on the euro’s introduction could swing either way over the next few years depending whether these concerns are addressed by the UK government.’

He added that government would need to address the concerns of business if it wanted to influence business opinion ahead of a potential referendum.

The survey also found that most companies were changing their trading strategies in the face of growing international trade. A third had already located parts of their production process abroad, while another 50% said they would do so in the next five years.

Links

Euro support slides among UK FDs

EEF online

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