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Will manufacturers bring production back to the UK after Brexit?

With high-profile companies such as Dyson planning to move their headquarters out of the UK, and Airbus considering a move if a no-deal Brexit happens, there has been a lot of speculation about what UK manufacturers will do once decisions are made in regards to the UK’s Brexit deal.

But despite these concerns, a range of companies have confirmed they are moving production to the UK or already invested in new premises, including engineering firm, FES; luxury eyewear business, Tom Davies; and vacuum cleaner manufacturer, Gtech. So will other businesses be bringing manufacturing back to the UK after Brexit?

It could be sector dependant…

According to a study done by the University of Sussex last year, different manufacturing sectors could see an increase in input but it depends entirely on what extent the sector sells to the EU market. For example, “The sectors classified as ‘textiles, apparel & footwear’ industry grouping seem likely to shrink as a result of Brexit: a very high proportion of their output is currently sold in the EU market. By contrast, the sectors in the ‘food processing’ group have generally lower sales to the EU, but import high proportions of UK consumption from the EU.” So areas of the country where there are many food processing roles could see gains in output.

The importance of the general UK manufacturing sector is recognised by many. A recent poll suggested that the Government should place increased value on the UK manufacturing industry, to help boost the economy once we leave the EU. Placing more of an emphasis on UK manufacturing makes sense when you think about the changes that will occur should we go through with a no-deal Brexit.

Changes to UK/EU trading

If the UK leaves the EU on 29th March 2019 without a deal, there would be immediate changes to the procedures that apply to businesses trading with the EU. It would mean that the free movement of goods between the UK and EU would cease.

According to gov.uk, the main changes to trading procedures would be that the EU would require customs declarations on goods coming from, or going to, the UK, as well as requiring safety and security declarations. And that immediately on importation to the UK, businesses moving excise goods within the EU, including in duty suspension, will have to place those goods into UK excise duty suspension, otherwise duty will become payable. Other tariffs (import and export taxes) could also become due.

However, these additional tariffs and taxes could, in theory, be absorbed in the longer term by moving manufacture back to the UK. This is obviously a real option for many companies who are taking steps to relocate their processes.

Finding solutions to manufacturing changes

To avoid inevitable supply chain disruptions and in turn lead times for customers, Westgate are seeing an increasing number of enquiries to assist businesses with ways of segregating the storage of more or differing goods within the same facility.

Westgate have also held numerous conversations with manufacturing businesses looking at ways they can facilitate increased production within their UK manufacturing sites, using the Westgate Flexicurtain product. This has been particularly prominent in the food manufacturing sector, to enable increased production of multiple products within the same facility, without the risk of cross contamination. This is something that falls in line with the research detailed in the University of Sussex’s report.

With a lack of UK warehouse space expected due to stockpiling, it makes sense that companies will have to look at ways to maximise the space they have. Westgate’s Flexiwall partition is a suspended fabric wall that allows for quick, clean space segregation, with the added benefit of being easily reconfigured, relocated or removed – unlike a solid partition wall. This allows for multiple types of products to be produced and stored under one roof. Flexiwall can also be used to enclose external canopies, creating more much needed storage space.

Many manufacturers may have to undergo construction projects within their warehouses to accommodate increased processes, such as extra production lines and increased storage spaces. Shutting down existing processes whilst these projects are carried out is unlikely to be a cost-effective solution, or even an option for many businesses. However, with Westgate’s Flexiscreen, construction, flooring, installation and extension works can be carried out within live manufacturing and warehouse environments. The unique v-overlap system and tight seal around ducts, pipes, steel work and at ceiling level ensures that Flexiscreen offers an over 99% dust tight seal, and can also be reconfigured for phased works.

The future of UK manufacturing after Brexit

Whilst nothing is certain, it’s clear that there are options available to the UK manufacturing industry in the event of a no-deal Brexit. What is clear however, is that as we get closer and closer to the prospect, the manufacturing industry is starting to make preparations.

Flexicurtain
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