Survey finds increasing Brexit alarm among manufacturers with 38% planning to move production outside the North

Manufacturing NI CEO Stpehen Kelly
Manufacturing NI CEO Stpehen Kelly

A new survey conducted by Manufacturing NI, the business lobby headed by Derryman Stephen Kelly, has highlighted high levels of alarm, frustration and concern among the secondary sector over ongoing Brexit uncertainty.

Among the poll’s starkest findings are that well over a third of local manufacturers said they planned shifting production outside of the North in response to Brexit, and that 50 per cent of firms said they had made no contingency plans to avoid new import and export tariffs.

In a statement published this week, ManufacturingNI, revealed its findings, stating: “Frustrations and concerns were clear with almost three quarters of manufacturers saying that Brexit will be negative to their business regardless of the deal.

“Only 16 per cent said they thought it would be positive and one in ten believing it will have no impact. It is clear that efforts to convince business that the UK outside of the EU will prosper have, so far, failed.

“Just 21 per cent of businesses wanted the UK out of the EU’s Single Market and Customs , with 38 per cent hoping the UK as a whole would remain but 41 per cent preferring to have some sort of special arrangement for Northern Ireland either in retaining full membership or being a bridge between the UK and the EU.

“Almost half of businesses were most concerned about the cost of tariffs on imports and exports with 39 per cent worried about non-tariff barriers such as customs costs and delays or being blocked out of markets due to regulatory restrictions or differing products standards when the UK leaves the EU.

“Half of firms have made no plans or minimal changes to avoid any additional tariff costs from importing or exporting. Only 16 per cent of firms were making plans or investments to benefit from Brexit either by expanding production or investing in sales development in the UK and outside of the EU.

“More worrying was more than a third, 38 per cent are planning on shifting production outside of the UK or by developing their own facilities, making a purchase of creating new partnerships inside the EU.”

The survey was conducted prior to last Friday’s progress report on phase 1 of the Brexit negotiations between the European Union and the United Kingdom, which, of course, included major putative wins for local businesses.

Article’s 49 and 50 of the report committed the UK and thus the North, to, at worst, full alignment with the rules of the EU’s Internal Market and Customs Union after Brexit, as well as “unfettered” access for Northern businesses to the Great British market.

This is acknowledged by ManufacturingNI who state: “Friday’s agreement provides assurance about what the fall-back position will be if no agreement is found in Phase 2 or Phase 3.

“It commits both the UK and the EU to not place a border across the Irish Sea or across the island of Ireland. This deals with most of the areas which would place barriers to trade east west and north south. Agreement is still needed to ensure that there are no tariffs or how VAT at the border between the EU and the UK can be collected and distributed.”

The lobby suggests the deal affords the North an opportunity to carve out a niche as a pivotal trading hub in a post-Brexit world.

“Friday’s agreement offers some reassurance, for now. But, it also presents a chance to be that bridge between the UK and the EU which would make us one of the most attractive investment locations in the world.

“A chance to not only have our cake and eat it, but make it too!”