New post-Brexit trade restrictions have pushed up the cost of parts and raw materials for two-thirds of small British manufacturers surveyed last month. A majority reported some level of disruption.
Post-Brexit Trade Restrictions
The survey of nearly 300 firms, by consultants South West Manufacturing Advisory Service (SWMAS) and the Manufacturing Growth Programme, a government and European Union-funded initiative providing support to small firms, adds to the picture of disruption from new customs checks that came into force on January 1 for goods trade with the EU.
“Price hikes in the supply chain have been immediate, and we are hearing tales of lead times being extended on raw materials,” said Nick Golding, managing director of SWMAS.
Some 65% of manufacturers reported higher costs, and 54% said they had greater difficulties exporting goods to the EU.
Around a fifth of manufacturers thought they might gain from customers bringing work back to Britain from the EU.
Britain’s government has said many of the difficulties are “teething troubles,” and last week said it would make 20 million pounds available to help small firms get used to the new rules. Further restrictions are due to take effect later this year.
Earlier this month, the Bank of England forecast that Brexit-related trade disruption would reduce economic output by 1% during the current quarter, equivalent to about 5 billion pounds. It expects trade to fall by 10% in the long term.
Brexit supporters say Britain will gain long-term advantages by setting its own trade rules with countries outside Europe and greater control over domestic regulation.
Exports from the UK to the EU Down 68%
According to a trade body representing haulers, exports from Britain to the European Union fell by 68% in January as trade was disrupted after the end of a transition period following Britain’s departure from the EU.
The government did not confirm the data and said disruption at the border had been minimal since Britain completed its journey out of the EU’s orbit at the end of 2020 following an agreement on trading arrangements.
Since the start of the year, businesses and haulers have had to adapt to new trading arrangements, including new systems for companies and officials in the British province of Northern Ireland.
Some businesses have struggled with new customs declarations and health certificates as the coronavirus pandemic also hit firms.
International members at the Road Haulage Association (RHA) reported a 68% fall in exports in January, the group said on its official Twitter account.
“I find it deeply frustrating and annoying that ministers have chosen not to listen to the industry and experts,” RHA chief executive Richard Burnett told The Observer newspaper.
The government said it engages with the sector and does “not recognize the figure provided on exports,” according to The Observer newspaper.
“Thanks to the hard work of haulers and traders to prepare for change, disruption at the border has so far been minimal and freight movements are now close to normal levels, despite the COVID-19 pandemic,” Richard Burnett stated.