Brexit causes provide issues for small British producers: Reuters survey
© Reuters. FILE PHOTO: Border control at Dover port
LONDON (Reuters) – New post-Brexit trade restrictions have skyrocketed the cost of parts and raw materials for two-thirds of small UK manufacturers surveyed last month, with a majority reporting some disruption.
The survey of nearly 300 companies by consultants from the South West Manufacturing Advisory Service (SWMAS) and the Manufacturing Growth Program, a government and European Union-funded initiative to support small businesses, adds to the picture of disruption from new customs controls at Kraft am January 1st for trade in goods with the EU.
“The price increases in the supply chain have been immediate and we hear stories of increasing lead times for raw materials,” said Nick Golding, managing director of SWMAS.
65% of manufacturers reported higher costs and 54% said they had more difficulties exporting goods to the EU.
Around a fifth of manufacturers believed they could benefit from customers bringing their work back to the UK from the EU.
The UK government has said many of the troubles are “teething troubles” and announced last week that it would be allocating £ 20 million ($ 27.7 million) to help small businesses comply with the new rules get used to. Further restrictions should come into force this year.
Earlier this month, the Bank of England projected that a trade disruption caused by Brexit would reduce economic output by 1% in the current quarter – which equates to around £ 5 billion – and expects trade to decline 10% in the long run.
Brexit proponents say the UK will see long-term benefits from setting its own trading rules with countries outside of Europe, as well as more scrutiny of national regulation.
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