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UK: Manufacturers warn that Brexit would add to soaring costs in 2022

UK: Manufacturers warn that Brexit would add to soaring costs in 2022
UK: Manufacturers warn that Brexit would add to soaring costs in 2022

Manufacturers operating in the UK have reportedly warned that the British industry will face more soaring costs due to Brexit. The bleak assessment comes amid growing concerns that custom delays as well as red tape would become one of the major challenges for firms this year.

Make UK, an organization representing around 20,000 manufacturing enterprises of various scales and sizes throughout the country, stated that the after-effects of UK’s departure from the EU have undermined the optimism that had grown amongst its members.

In a survey of 228 firms, two-thirds of industrial company leaders have stated that their business was moderately or significantly affected by Brexit, which concluded about a year ago. Meanwhile, more than half of them warned that they would bear further financial damages this year from things like product labeling changes and custom delays, as import checks are put in place.

In the 2022 Make UK/PwC Senior Executive Survey, disruptions due to Brexit continue to be one of the major concerns industry bosses will face this year as the fallout from COVID-19 and rising costs faced by companies complicate further.

Custom delays, additional costs for adhering to separate regulatory regimes in EU and UK, and highly reduced access to a pool of migrant workers were some of the top concerns mentioned in the survey.

The warning comes as another research revealed how Britain’s economy was slowing down by the end of last year due to the hit in demand caused by the Omicron variant.

Despite the above concerns, Make UK and PwC have said that as many as three-fourths of the companies in its survey are expecting conditions to improve in manufacturing over the year, with around 73% believing opportunities will outweigh the risks.

Make UK survey also showed that two-thirds of the companies believed the UK to be a competitive manufacturing location, with about one-thirds looking for reshoring their supply chains and relying on domestic sources.

The organization said that the shift, even in the short term, showed the possible death of the just-in-time business model of the supply chain, which may turn out to be good for British manufacturers to become resilient against unforeseen international risks.

Source credit: https://www.theguardian.com/business/2022/jan/10/brexit-changes-will-add-to-soaring-costs-in-2022-warn-uk-manufacturers

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Sunil Jha

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