Brexit blow for business – but future looks bright
BREXIT issues are causing a big headache for the South West’s small and medium-sized manufacturers as they suffer price hikes and a shortage of materials, a new report reveals.
The latest South West Manufacturing Barometer says Brexit has led to significant disruption for firms already trying to recover from the economic effects of Covid-19.
The report, produced by SWMAS business consultants, reveals 61% of companies have seen negative price changes within their supply chain since leaving the European Union, with the availability of raw materials an issue for 52% of firms.
More than half of regional respondents cited complications with importing goods (53%), while 43% found exporting products more difficult since December 31.
This survey also highlighted that less than two-fifths of small and medium-sized (SME) manufacturers feel they are getting the right support and guidance from the Government on how to navigate changes caused by Brexit, underlining the need for better communication and additional tailored support.
On a more positive note, businesses in the South West appear to be more optimistic about the future than their national counterparts.
Data showed that 42% of regional manufacturers have increased sales in the past six months, with half expecting further growth between now and the summer, compared to 31% and 44% nationally.
That said, only 15% of senior business leaders responding to the survey expect increasing sales as a result of the Brexit deal, indicating that future growth predictions are based on their own actions and an improving Covid-19 situation.
“South West manufacturers have had to deal with unprecedented levels of change over the past 12 months and it is encouraging to see the manufacturers in the region having the confidence to look forward to the future positively, based on the way they have adapted and changed throughout this difficult time,” said Nick Golding, managing director of SWMAS.
“However, despite signs of an initial recovery, firms have a new set of issues to contend with now the Brexit deal is done. Price hikes in the supply chain have been immediate, and we are hearing tales of lead times being extended on raw materials.
“Over half of respondents are not convinced that the Brexit guidance they have already received from the Government is adequate. SMEs are asking for more clarity on key issues, such as product markings and CE replacement (54%), sourcing components/services overseas and logistics or freight forwarding (both 49%). These challenges need to be addressed, and quickly.”
He added: “Reshoring has been spoken about as a potential opportunity and there is some confidence from manufacturers that new purchasing trends might drive increased sales to the UK. We would love to see more made of this and perhaps even a co-ordinated campaign to promote the benefits of locating production back home.”
Away from Brexit struggles, the latest Manufacturing Barometer paints a more optimistic picture of industry in the South West bouncing back from Covid-19, in comparison to the metrics in the national report.
All key performance data for companies have seen positive moves since the last report.