28 March 2019

Financial Times: German businesses prepare to shift operations out of Britain

The British Chambers of Commerce in Germany has warned of “massive harm” to the economic relationship between the two countries in case of a no-deal Brexit, pointing out that almost a quarter of its members were preparing to shift business out of the UK.

“The damage for business is already here,” said Michael Schmidt, president of BCCG, which represents UK companies active in Germany and German businesses active in Britain. Mr Schmidt warned, however, that a possible no-deal Brexit would inflict even greater pain on an economic relationship worth €180bn in goods and services a year. 

“At the moment there is an overwhelming majority of companies that fears massive harm [from no-deal Brexit] both in the UK and the rest of the EU and especially in Germany,” he added. 

A survey of 101 of the chamber’s member companies found that 13 per cent were planning to move all or some of their business from the UK to Germany in case of a so-called hard Brexit. A further 10 per cent said they were planning to move business from the UK to another EU member state. Not one respondent was planning to move more business to the UK under a hard Brexit scenario. 

A large majority of respondents said they expected Brexit to have an impact on their business, with 14 per cent fearing a “very big impact”, 25 per cent fearing a “big impact” and 38 per cent a “moderate impact”. Almost half of all companies surveyed by the BCCG said they expected both an impact on sales and on their administrative burden. 

Eight out of 10 companies surveyed said they expected the British economy to decline in 2019. 

“The survey shows that Brexit will force companies to adapt their business activities in the German-British corridor in multiple ways,” said Andreas Glunz, a managing partner at KPMG, who oversaw the survey. “What becomes clear is that after the banks there is also a quarter of companies in other sectors that plans to shift activities to the European continent.” [...]

Full article on Financial Times (subscription required)

© Financial Times