Tractor sales slump blamed on Brexit uncertainty

New tractor registrations have slumped to the lowest level in almost a decade, according to monthly figures released by the Agricultural Engineers Association.

Just 480 machines larger than 50hp were registered during February – an 18% drop on sales in the same month last year.

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It is the lowest figure since December 2010 and the second steep monthly fall in a row, the AEA said.

In total, registrations for January and February 2019 reached 1,110 units (50hp plus), which is a drop of 13% or 172 fewer machines sold.

Compact tractor sales (under 50hp) also fell sharply in February with a 19% decline compared with the same month in 2018.

AEA economist Stephen Howarth suggested that although February was traditionally the quietest month for sales, the sharp drop could be due to Brexit uncertainty.

However, NFU chief economist Andrew Francis was less circumspect and blamed the drop in investment on a lack of detail surrounding the Brexit deal.

Dr Francis said the lack of machinery investment confirmed the results of the NFU Confidence Survey carried out late last year.

“The survey showed that 21% of farmers were planning to reduce investment against just 9% who were looking to increase it,” he explained.

The survey looked at short- and medium-term confidence and both measures had become negative in the two years since the UK voted to leave Europe, Dr Francis said.

“This fall is clearly related to Brexit and shows we need certainty over the trade deal and more detail on the Agriculture Bill.

“We only have assurances for the first year after we leave and no detail beyond that,” he added.

The decline in machinery sales has come despite government efforts to boost investment in plant and machinery through tax relief measures introduced in the Autumn budget.

In October 2018 chancellor Philip Hammond unveiled a temporary increase in the annual investment allowance from £200,000 to £1m.

The relief permits expenditure on plant and machinery up to the allowance limit to be set against business income in the year the expenditure occurs.