One month on from the Brexit vote

Three weeks on from the Brexit vote, speculation about its impact on UK manufacturing continues. Real evidence is still hard to find, and will always be tinged with uncertainty due to the complex factors involved. The Manufacturer digests the latest Brexit opinions, sorting the evidence of positive or negative impacts from the pure speculation.

Evidence of positive impacts of Brexit on UK manufacturing:

The sharp fall in the value of the pound .. is something we are already taking advantage of (MNB Precision 18/7)
Brexit could pave the way for Britain to expand trade relations with the rest of the world (Frost & Sullivan 27/6)
If the devaluation [of the pound] sustains, we could see exports becoming more attractive (Frost & Sullivan 27/6)
A drop in the value of sterling could make the UK a magnet for trade (KPMG 24/6)
The need to reshape trade policy may result in quicker decision making, and reduced red tape (KPMG 24/6)
A points-based system .. could result in us welcoming in higher quality candidates (Love Energy Savings 24/6)
Negotiat[ing] our own trade deals .. and .. favourable corporation tax regimes .. [could] boost competitiveness (Menzies 24/6)
[Replacing] EU legislation with UK regulations .. could result in potential benefits for the UK (BCF 28/6)

Evidence of negative impacts of Brexit on UK manufacturing:

Brexit could make EDF re-examine the feasibility of the [Hinkley Point C] project (Frost & Sullivan 27/6)
The EU Circular Economy Directive standards would have required invest[ment] in waste recycling to meet higher standards (Frost & Sullivan 27/6)
The result [of standardisation facilitated by European bodies] has been some highly integrated and efficient supply chains (Durham University 27/6)
There are significant implications for the supply chain, such as the application of tariffs (KPMG 24/6)
There are very real implications to the access to engineering talent. Firstly in retaining their non-UK workforce, secondly in attracting non-UK based expertise and thirdly developing talent on a much greater scale than they do currently (KPMG 24/6)
Even if the direct impact is delayed for the negotiation window before the UK formally withdraws, contracts will be affected by the uncertainty in the interim (Irwin Mitchell 24/6)
Whatever new system results, administration, time or cost increases [associated with documentation, processes or duties] for manufacturing sector companies trading with EU-based organisations are certain (Tudor International Freight 24/6)
Investor confidence, interest rates and the activity of UK banks is most likely to impact SME financing and growth (Menzies 24/6)
Political and economic uncertainty will reduce investment. We can expect a tightening of credit from the banks and businesses to conserve cash rather than invest (Shakespeare Martineau 24/6)

Speculation:

Immediate uncertainties could bring benefits or extra costs – for example, short-term currency fluctuations (Institute of Export, 21/7)
Britain could also see the departure of automotive plants .. if manufacturers cease to enjoy the benefits of tariff free trade with the EU (Frost & Sullivan 27/6)
EU citizens working in the high-tech sector may feel their careers are best served elsewhere .. and seek opportunities elsewhere in Europe (Frost & Sullivan 27/6)
Whether manufacturers will choose to locate or develop their operations in the UK, with the possibility of tariffs in place, remains to be seen (KPMG 24/6)
Data protection laws are out-dated and  .. will not stay the same for long, even though we are leaving the EU (Irwin Mitchell 24/6)
UK businesses are trading across the world, not just in Europe, and exiting the EU is unlikely to reduce trading opportunities in the long term. Entrepreneurs will simply just get on with it (Entrepreneurial Spark 24/6)
Reduced access to low-cost EU workers could lead to skills shortages in certain areas of the supply chain and rising wage costs (Vendigital 24/6)
For small businesses who are looking to grow outside of the UK, airfares will be crucial.. if prices spike following the exit from the EU (Love Energy Savings 24/6)
There is a possibility that the need for Visas will complicate the recruitment process, making it more expensive and therefore deterring SMEs from hiring [EU] nationals (Love Energy Savings 24/6)
For small businesses, the loss of the late payment directive could add further pressure to SME cash flow if not replaced with a similar measure to protect firms’ working capital. In recent years, this provision has proven instrumental in increasing the competitiveness of UK businesses (Menzies 24/6)

Contact us at editorial@hennikgroup.com if you would like to have your opinion on the potential impact of Brexit included in subsequent round-ups.