15 October 2019

Financial Times: Brexit uncertainty hitting manufacturing profit levels, poll finds

Almost two-thirds of companies in a poll by Make UK, the manufacturers’ organisation, said that Brexit worries had already undermined profit margins in the past two years. Nearly half had seen a negative change in EU customer and supplier attitudes towards doing business with them.

Manufacturing, which comprises about 10 per cent of the UK economy, is among the sectors most likely to be hard hit by border delays and tariffs given its reliance on ‘“just in time” delivery of supplies and the high level of exports to customers in the EU. Make UK estimates that there has been a net fall of 120,000 manufacturing jobs since the 2016 referendum, based on official data, as a result of Brexit alongside other political and economic changes.

Stephen Phipson, Make UK chief executive, said: “We have already seen major companies voting with their feet and taking their planned business operations away from the UK, while many businesses are losing out on new contracts with EU customers.”

Make UK has highlighted Japanese carmaker Nissan as an example of a company that has threaten to move operations elsewhere partly because of Brexit concerns.

Manufacturers have been angered by comments from government ministers that business is prepared for Brexit, with home secretary Priti Patel criticised over the weekend for appearing to disregard industry concerns over a hard Brexit in a BBC interview. Michael Gove, cabinet minister in charge of no-deal preparations, was also attacked last month after he said that companies in sectors such as retail were prepared for Brexit.

“We repeatedly hear from the government that we are ready when we are not,” said Mr Phipson, who warned that the supply chain could break down unless smaller companies were protected.

Just one-third of companies told Make UK they were significantly prepared for a no-deal departure, contradicting repeated government assertions that industry was ready for any outcome. [...]

Full article on Financial Times (subscription required)

Make UK/Squire Patton Boggs research

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