Brexit is already taking a toll the manufacturing industry, with the biggest decline in orders seen for over two and a half years.
The decline in industry
CBI surveys for May indicate a significant drop in business likened to “economic paralysis”. The report shows record lows for orders since October in 2016, and even export orders have slumped to similar figures around the July 2016 referendum.
From the 279 firms surveyed, orders were under normal levels for 32% of car manufacturers, and 23% for those where the order books gave a balance of -10%. Increased price pressures and reduced orders have impinged significantly on margins across the manufacturing industry.
The pound has also struggled through the month, losing five cents against the dollar and four cents against the euro. Despite potential benefit to the lower pound value, imported raw materials have become more expensive and firms are under even greater pressure to lower prices to be competitive.
Stockpiling has increased, with a 0.5% economy boost for the quarter reported in January that has resulted in a trade deficit increase to £18.3bn; the gap has doubled between UK exports and imports to a record level – https://www.bbc.co.uk/news/business-48225334.
The cost of Brexit uncertainty
Without any formal agreement with the EU after Brexit, there are fears textile and car firms will face disastrous consequences. A no-deal Brexit could result in increased costs of imported raw materials and uncertainty over export tariffs and delays at the UK’s borders that could cripple production. Nonetheless, the motor trade industry continues to be a staple of UK life and the need for buying, selling and repairing cars, motorbikes and vans will continue, so motor trade insurance will always be imperative. When it comes to the question of what is motor trade insurance, these policies are vital to protect businesses as motor trade insurance can offset the impact of damage and theft that could otherwise be highly costly and disruptive.
It’s a worrying state of affairs for many industries. British Steel is facing possible bankruptcy as it desperately seeks a buyer and many automotive outfits, including Nissan and Honda, are moving production plans elsewhere and closing UK factories.
Many experts are now calling on Parliament to end Brexit uncertainty and secure a deal to rescue British firms and industries from the current decline towards disaster.