UK manufacturers face uncertain year study finds

Manufacturers in the United Kingdom say increased costs and delays brought on by the country's withdrawal from the European Union continue to undermine confidence within British industry.

The after-effects of Brexit, such as customs delays and red tape from new rules that hinder supply chains, are among the main challenges companies will face this year, according to an industry survey.

The study by trade body Make UK and accountants PwC found that two-thirds of industrial company leaders believed Brexit had hampered their businesses in the nearly two years since the UK left the EU.

The survey revealed that although British businesses are positive about the growth outlook, inflationary pressures and talent access and retention are among key issues of concern that add to the fall-out from the COVID-19 pandemic, reported The Guardian.

In comments issued with a summary of the survey, Stephen Phipson, chief executive of Make UK, said: "It's testament to the strength of manufacturers that they have emerged from the turbulence of the last couple of years in such a relatively strong position. While clouds remain on the horizon in the form of rapidly-escalating costs and access to key skills, the outlook is more positive for those that remain adaptable, agile and innovative."

Almost two thirds of companies felt the UK to be a competitive location for manufacturing with just 13 percent believing it to be an uncompetitive place to do business. More than one-third said they are looking to "reshore" production to domestic sources, amid supply chain shortages linked to Brexit and the pandemic.

Make UK has forecast that manufacturing grew 6.9 percent last year, and is predicting growth this year of 3.3 percent. Its survey of 228 companies was conducted between Nov 8 and 29.

Quoted in the survey news release, Cara Haffey, PwC's UK industrial manufacturing and automotive leader said optimism was growing. "Despite facing an unprecedented combination of continued COVID-19 pressures, cost inflation and supply chain issues, our manufacturers are responding with an impressive amount of agility and resilience, which will stand them in good stead for the year ahead.

"They have learned valuable lessons about their supply chain vulnerabilities and the resilience needed to respond to unforeseen international or domestic risks, and are strengthening their businesses digitally as well as continuing to focus on talent and skills."

Food importers face more rising costs with post-Brexit checks being introduced this summer, reported The Daily Telegraph.

Industry leaders said the biggest disruptions will come in July when physical inspections by border authorities on animal and plant products come into force.

Richard Ballantyne, chief executive of the British Ports Association, was quoted by the paper as saying that extra charges would be passed on.

"If your goods are inspected, there is a cost … that obviously is then passed on to the importer and ultimately, that is passed on to manufacturers and consumers."

He added: "If you're thinking about transporting a lorry from the Continent to here, that might be quite substantial."