UK manufacturing preparing for no-deal Brexit

Published:  14 August, 2018

The clear majority (83%) of British manufacturers have confirmed they are now preparing for a hard Brexit by actively forging new relationships with Rest of World territories, in readiness for reduced orders from the continent following the UK’s imminent departure from the EU.

Manufacturers are expecting to trade with Asia (44%), as well as the Americas, Africa and the Middle East, helping to mitigate the very real threat to British production posed by a hard Brexit scenario. A proactive global outlook is helping to cement what could be viewed as a bullish mood among manufacturers in Britain about their prospects post Brexit, despite 81% of UK manufacturing companies predicting a dramatic drop in orders from EU-based countries.

In addition to reduced orders, manufacturers identified factors expected to have the biggest impact on business post Brexit. A fifth anticipate budgets to be under greater pressure, while 21% highlight the issue of increased trade tariffs on goods imported and exported. A possible divergence in standards and legislation and increased complexity in trading with EU countries are also concerns raised by 18% of those participating in the study.

Non-trade barriers such as border checks and increased administration and time required to import and export, along with general supply chain disruption, are identified by 17%.

The latest industry snapshot draws upon extensive research amongst the UK’s leading manufacturing executives, released alongside the launch of a new report from Sheffield Hallam University and SSG Insight. The report, Harnessing Brexit, Technology and Insight: British Manufacturers, a Competitive Edge in an Age of Uncertainty and Opportunity, is co-authored by Dr Hongwei Zhang and Professor Sameh Saad from Sheffield Hallam University and Jon Moody of SSG Insight. It discusses the optimism and concern around two of the most critical challenges facing modern Britain: Brexit and the relentless rise of technology, particularly in the form of Industry 4.0.

The report also reveals that manufacturers are more than twice as likely to point to global competition than Brexit when asked what they consider to be the biggest challenge disrupting the industry, closely followed by the Internet of Things and capability to handle data from connected technologies.

Brexit and the shift of focus away from the EU is expected to result in the acceleration of AI and automation within British factories. This will enable greater scalability in terms of production volume, speed of new product development and achieving greater economies of scale to better compete on a global scale. As such, more than half (59%) of UK manufacturers are intending to invest in smart, connected technology to drive forward international growth. This compares to 20% planning to invest in machinery and hardware, 18% investing in research and development and 17% investing in sales and marketing.

Dr Zhang, principal lecturer at Sheffield Hallam University, said: “With numerous Brexit scenarios on the horizon and hard Brexit a very real threat, our research has found that Britain’s manufacturing sector is showing determination to remain resilient through this tumultuous period.”

SSG Insight says it has earned an impressive reputation for delivering world-class data analysis, helping British manufacturers compete globally by effectively managing their assets to drive better business performance. Jon Moody, chief product officer, said: “It’s clear from our research that British manufacturers are resolute as the UK enters a new era. Although there are concerns over tariff rates and regulatory barriers, many are actively forging relationships with new territories throughout the world. A confidence is very much emerging from the uncertainty.”

For more information visit www.ssginsight.com

Click here for a link to the report

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