Industry chief warns no deal catastrophic for manufacturing in UK

Survey shows lack of agreement would make UK far less attractive for industry
Key findings:
 
· 49% of companies believe leaving the EU with ‘no deal’ would make the UK unattractive as a manufacturing location, compared to 28% who say it would be more attractive
 
· Where companies have offshored production since the referendum the EU is the most common destination
· Where companies who have adjusted supply chains since the referendum, over one third have offshored, of which four fifths have offshored elsewhere in the EU
· Half of those who have adjusted supply chains say their costs have increased
· A quarter of companies have stockpiled and a further quarter are considering it
· A lower tax burden (53%) and energy costs at or below the EU average (52%) would encourage more manufacturing activity in the UK
· Key selling points for UK manufacturing are the branding and reputation of UK goods plus a skilled workforce. A sizeable proportion also cited UK membership of the EU.
 
The head of Britain’s manufacturers has warned the Government that leaving the EU with no deal would be catastrophic for the sector and that the prospect of applying zero tariffs on imported goods as a consequence would kill off some sectors of industry overnight.
 
  The survey also shows that since the referendum in 2016 companies have already taken significant including offshoring production. Of those who have done so, almost two thirds (61%) have switched production elsewhere in the EU. By contrast just one fifth of companies (19%) have switched production back to the UK.
 
  Furthermore, of those who have adjusted supply chains a third (35%) have offshored with the EU being the most common destination. A quarter (26%) have reshored production back to the UK, the vast majority of which has come back from the EU.
 
  The survey also shows that adjusting their supply chain has been a costly exercise for companies with over half (51%) saying it has increased their costs with just 10% saying this has reduced their costs.
 
  The financial impact of preparing for Brexit is also evident in the fact around half of companies have taken action to stockpile goods or, are considering doing so, with over half (56%) of those who have started stockpiling experiencing some financial difficulty in doing so.
 
  Looking ahead to a post Brexit economic environment 53% of companies believe a lower tax burden would help encourage manufacturing activity in the UK, followed by 52% of companies who say a Government commitment to keep energy costs at or below the EU average would do so.
  Companies were also asked what they consider to be ‘great’ about manufacturing in Britain.
 
The two elements that stand out as the Britain’s key selling points are the branding and reputation of UK made goods (61%) and skills in the workforce (54%). The UK’s membership of the EU was also highlighted by a sizeable proportion of manufacturers. Two in five (39%) consider the ease of moving goods in and out of the country a ‘great’ thing about Britain, and the same proportion regard being part of the EU market as a ‘great’ thing about Britain.
 
  The survey of 429 companies was carried out between 28 January and 5 February
 
About Make UK
 
Make UK, the manufacturers’ organisation, is the representative voice of UK manufacturing, with offices in London, Brussels, every English region and Wales.
 
Collectively we represent 20,000 companies of all sizes, from start-ups to multinationals, across engineering, manufacturing, technology and the wider industrial sector.. 
 
 
 

Date : 19.03.2019