Ever since Britain decided to leave the EU in June 2016, Brexit has dominated the news and impacted and concerned all areas of business, in particular, the Manufacturing Industry. Written below are several events that have occurred in the industry during Brexit.
Recently, in April 2019, the Manufacturing sector suffered a decrease in exporting stocks. Brexit caused many foreign firms in the EU to turn down a variety of goods and manufacturing opportunities from the UK. According to the Manufacturing Purchasing Index (PMI), March had a record of 55.1% in terms of stocks, but the numbers dropped to 53.1% in the following month. If the figure is above 50, it shows that the country is making excellent progress with its industry.
With the lack of new goods and any output from the UK however, many manufacturers have lost their jobs throughout the last four months of 2019. This decrease in employment and output continued into May, with the record slowly declining to 49.4%.
As these figures have dropped, so have the demands for new goods. Recent statistics from the Q2 Manufacturing Outlook survey show that employment figures, in the next three months, may plunge from 16% to 6% and that the same result applies to investment levels from other companies. They argue that this is due to a decline in stockpiling and the knowledge that clients across the globe are cutting off trade routes with Britain. Many manufacturers in the UK will be at risk of losing their job, due to global competition from different countries, something which has been bought about by Brexit.
A major concern that has become apparent during Brexit is a No-Deal deadline. This means that if the UK and EU are unable to reach an agreement about their relationship after Brexit, all trades and communication will cease immediately. Various manufacturing enterprises, such as BMW and Rolls Royce will be affected, as they have received new materials from across the EU just in time for when the materials are needed. The impact of the no-deal could potentially increase a high percentage of job losses for the industries. It may also alter the supply chain in Britain, with a rise in the costs of importing/exporting goods and slower shipping times. In addition, these new costs would affect the economy of Britain’s manufacturing companies, by making their overseas trades all the more expensive and damaging their finances.
Although the Brexit deadline has been extended to the 31st October 2019, this has caused tension amongst several industries, one of which includes car production in the UK. The Society of Motor Manufacturers & Traders (SMMT) talked about the fall in their production lines in April, claiming that only 70,971 car models were made, much less than their figures from a year ago (127,970 models in total). Car factories, such as Jaguar Land Rover, Honda and BMW have been closing down due to fears of the no-deal Brexit deadline, resulting in this sudden plunge, and SMMT have reported that unless the UK leaves with a reasonable deal, then this decline may continue and affect manufacturers badly