British manufacturers are having concerns over the new trading relationship between the UK and the EU bloc.
A study conducted by Make UK in partnership with PwC revealed that manufacturers are fearful of the outlook for both investment and international talents in the UK.
Negative Outlook After the UK Leaves the EU Bloc
A considerable percentage of British manufacturers think both areas should see a decline now that Brexit is finalized.
According to the survey data, only about 18% of manufacturers believe that the UK’s investment prospect will increase. Likewise, only about 16% believe that the exports to the EU bloc will increase, regardless of the trade deal. 26% of the respondents believe that the export to the EU single market will decrease, and about 33% believe the UK will be a less attractive destination for talents.
Manufacturers believe that the most significant risks stem from the custom delays (47%), followed by the lockdowns (46%), costs of regulations (39%), and potential relocation out of the UK (14%).
In general, the research showed that 56% of the firms who answered the survey expect the economy to deteriorate, while 46% are more optimistic about the UK economic prospects.
Surprisingly, in contrast to the UK economy’s gloomy prospects, almost 48% of the participating firms believe that the manufacturing industry will see significant to moderate improvement in 2021.
The Fresh Market for the UK
Make UK Chief Executive Stephen Phipson said that the transition to the new trading regulations might pose the biggest challenge for the manufacturers, despite the trade deal. However, he seems to think that the UK can rise to rebuild the economy again by aiding the national efforts and “taking advantage of digital technologies opportunities.”
51% believe that there are more opportunities than risks to their businesses, though 27% believe that the chances are greater. The forecasts relating to recruitment are also looking up, with 44% of the firms seeing an upward trend in their headcount. Company strategies are also on the rise, with 44% of the firms committing to training investments and 37% on apprenticeship.
The survey participated upon by 206 manufacturers shows positive indicators for their businesses. Though controlling costs remains the biggest priority for companies, about 57% are still looking at investing in new product development and digital technologies, while 25% are looking at overseas activities.
As the UK exits the EU bloc, companies started seeking fresh market opportunities. About 25% of the firms admitted that they are looking to re-shore overseas activities. Another 25% are showing interest in identifying new or additional suppliers in Britain as a high priority. About 30% of the companies also expressed interest in entering new markets, creating pattern shifts for the UK trade.
PwC UK’s manufacturing and automotive leader, Cara Haffey, said that the EU trade deal and the positive progress on COVID-19 vaccination boosts the need to protect the supply chains and exports, creating a future with better clarity.
“It’s crucial [that] businesses can swiftly respond to our new relationship with the EU, especially relating to people movement, if they are to remain competitive in an increasingly customer-focused global stage.”