ETMM Special Report UK manufacturing divided on Brexit implications
Great Britain - Manufacturing companies see positives and negatives in what the future holds but are preparing themselves for the worst.
Earlier this summer the British electorate were given a choice on continued membership of the European Union (EU) and chose to leave. Though Brexit will take two to three years to complete, it is likely to fundamentally alter the way that UK companies do business in Europe and further afield. Its impact on the manufacturing industry - including machine tool and mould makers and their suppliers - will be profound.
Like the UK electorate, British manufacturing companies are split on Brexit’s implications. Columbia Metals’ latest market conditions survey exhibited the full extent of opinion: Outright joy, perceived and real improvements in the value of exports and cautious optimism on the one side through to predicted slowdowns, reduced turnover and deep pessimism on the other.
“Market pressures at the moment are marginally worse than they were eight, ten months ago (sell more to stay still),” volunteered one anonymous participant. “Most of this can be attributed to a reduction in material prices. Order levels have not changed at all, merely the overall value. Doom-mongering in the press over Brexit has talked the markets down but already the financial markets have started to recover. In six to 12 months’ time, we will be seeing serious shoots of improvement as confidence returns and we start to negotiate our own free trade agreements (FTAs), which should boost exports.”
A survey carried out by the British Plastics Federation (BPF unearthed similar sentiments. The BPF estimates there are 5,200 manufacturers of plastics products in the UK, with a further 400 engaged in the manufacture and distribution of machinery and ancillary equipment.
“Our members are cautious about their economic performance in the short term,” said Philip Law, Director General of the British Plastics Federation. “With so many unknowns and the devaluation of the pound affecting the price of raw materials and machinery, it is unsurprising that in the few days and weeks following the result of the referendum we see a slight downturn in some of the key economic predictions.”