What will Brexit mean for the manufacturing sector?

With the Brexit transition period ending on 31st December, at this late stage of the game, how things will look for UK manufacturing businesses going forward is still mired in uncertainty.

While, on paper the manufacturing sector makes up for around 10% of the UK economy, the wider picture is harder to effectively measure – with many of those in the services and tech sector dependant on the survival of their manufacturing customers. Therefore any negative impact from Brexit to UK manufacturing will have repercussions far beyond the sector itself.

Whether a deal is agreed upon ahead of the end of the transition period, or in the result of a no-deal Brexit, there are still potential issues which manufacturing companies both in the UK and overseas will need to navigate as the UK moves forward outside of the EU.

Imports and Exports

One of the biggest fears for manufacturers is the uncertainty which still surrounds what will happen with the movement of goods. Potential increased tariffs, requirements for separate safety certifications and other delays in the supply chain all pose a threat to the outputs of many.

While the government has now provided some guidance, there is still much to clarify and while (at the time of publishing) a trade deal is still being negotiated for businesses who are dealing with the effects of a global pandemic it’s a worrying time.

However, there are ways in which organisations are already preparing – undertaking close examination of supply chains, putting in place measures to move locations, and working together with suppliers to mitigate delays.

Innovation

While big steps were already being made when it comes to adopting new technology in the sector, it will be interesting to see whether, as a direct or indirect result of Brexit, companies move towards using more tech to increase productivity, improve product innovation and streamline process.

Technologies such as AI, IoT (the internet of things) and cloud based systems have already allowed manufacturers to be more agile with how they operate which could position them well to weather any Brexit related storms.

People and talent

With potential changes to free movement and employment, manufacturing businesses could need to make significant changes to how, and where they employ staff.

As mentioned above, a stronger reliance on tech may see those in the industry investing more heavily in hiring skilled IT staff, and we have already seen a shift towards a heavier balance of knowledge staff within manufacturing organisations.

Interestingly the huge shifts to working practices that have been forced upon many by the pandemic may have enabled businesses to be more “Brexit ready” when it comes to people. Many have had to quickly adopt cloud based systems, and remote working, which could put them in a more favourable position when we leave the EU.

Ultimately, whatever happens after December 31st, one thing is for certain – those who have invested in their people and their processes will stand to weather whatever storm may come their way.