Brexit has undeniably reshaped the economic and industrial landscape of the United Kingdom, with London’s economy and the overall UK manufacturing sector facing significant challenges. A detailed analysis and reports highlight the multifaceted impact, emphasising the need for strategic measures to mitigate adverse effects.
Even though the British manufacturing sector is the ninth-largest in the world, Brexit has already had an impact and it could get even worse. Factories in Britain have suffered a sixth consecutive month in October showing fewer new orders thanks to the ongoing Brexit uncertainty. The industry is facing a tough future with weakened global demand for UK manufactured goods and employment issues.
According to an industry survey, Brexit has not only affected demand but also an increase in job losses. The survey was conducted before the announcement of the election which reflects two months of preparations for leaving the EU on 31 October. Of course, we all know what happened with that story.
The latest monthly CBI Industrial Trends Survey reports that UK Manufacturing output looks promising. They suggest that output has increased strongly and faster since the end of 2017. According to CBI, growth was broad-based, with output increasing in 14 out of 17 sub-sectors. Among the top performers are food, drink and tobacco and mechanical engineering.
Total order books show similar, healthy levels resembling that of December 2017. Exports remained stable, well above average and in line with the past 16 months. Output price expectations for inflation softened to the weakest in almost a year while stock levels moved below average. It hasn’t been smooth sailing as the UK Manufacturing sector faced some serious challenges.
While the CBI believes manufacturers will continue to benefit from robust external demand and the lower exchange rate, overall economic growth is expected to remain subdued. This comes as a result of weak consumer income growth and the continuous uncertainty stemming investments.
UK Manufacturing has continued its upward trend and toward the end of 2017, was named the eighth largest manufacturer by output in the world. This came less than one year after claiming ninth spot. Reports from EEF and Santander shows the nation’s annual output is worth nearly $250bn. If this current growth continues, UK Manufacturing could be in the top five as early as 2020.
Engineers are always in high demand and none more so than in advanced engineering. Looking to the future, the industry will need about 186 000 engineers by 2024. Another report, according to The Telegraph, suggests the UK is grossly lacking skilled engineers and would need 1.8 million new engineers and technicians by 2025.
Whichever way you look at it, these are big numbers to swallow. Engineering is not only central to ensure economic growth, it plays a vital role in global challenges. Among these are climate change, food security, health and safety, biodiversity, population and water security. Adding to the increased number of opportunities, engineering can yield significant financial reward.
We’re just getting to the end of the year and on the face of it UK manufacturing seems to have weathered the initial Brexit storm. There will undoubtedly be ups and downs over the next couple of years as well as uncertainty whilst the exit terms are negotiated.
Can you foresee what’s going to happen and be ready for every eventuality? Of course not! All you can do is make sure that you keep an eye on what’s going on and keep up with how the latest developments could have an impact on your business. There is little point in panicking and making huge changes until the unknown becomes known. By all means review things to see where you might need to change policies and processes if certain scenarios come into play. You may even go so far as to get some documents drafted and approved for use so that they can be brought into play immediately should your anticipated change become a reality. And for some of the big manufacturers who have many European offices and employees from other European countries in place, that is, in all likelihood happening right now.
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