So far Brexit has had a positive impact on the UK manufacturing industry and this looks set to continue with the UK recently being ranked as the world’s 8th largest industrial nation.
There are many opportunities for the UK moving forward as Brexit will provide greater flexibility for UK businesses to target new markets for example the UK could position themselves with lower-cost suppliers in countries like China.
Further more a drop in the value of sterling have made exports cheaper, and may make UK manufacturers more attractive to overseas businesses, who find that their money affords them greater purchasing power. UK businesses moving forward may look to source raw materials internally, where possible, given that the weakened pound has made importing foreign products significantly more expensive; this could provide a much-needed boost to the UK’s internal market.
We could also see increased production across many manufacturing industries due to EU quotas being lifted e.g. the UK were previously restricted on how much sugar could be produced.
However it is not all good news, some of the threats for UK manufacturers following Brexit include the possible restrictions of the free movement of people within the EU could create issues with the sourcing of labour in factories and other parts of the manufacturing supply chain.
For those manufacturing businesses which are looking to expand, it is possible that, in post-Brexit Britain, they may find it harder to obtain finance from their banks.
The manufacturing sector is highly regulated, with much of the legal framework being crafted by the EU. It would seem unlikely that the spirit of this regulation will be swept away, but there may eventually be a different set of requirements as the UK works through the legal ramifications of exiting the EU.
In summary until a clear plan is devised for the UK’s withdrawal from the EU, it is difficult to plan ahead decisively. However, now is the time for companies within the manufacturing industry to look critically at their business plans and to think strategically about where their company is heading.