Brexit uncertainty putting a freeze on business

22 August 2018

It’s with an apologetic caveat that I introduce the topic for this month’s editor’s comment as Brexit, as I’m aware that I’ve discussed the subject more than once recently. If you live outside the UK and find coverage of Brexit any combination of dull, prolonged, alarming or baffling—I can assure you that from here in Britain, it’s much, much worse. One thing I have learnt from talking to people in our industry is that there are always going to be ups and downs; companies tend to make hay—or more specifically, money—when the going is good, and when there’s a dip, businesses accept this and get through it as best they can.

It takes a lot for a market to be totally written off due to long-term decline—profits may drop, and of course the peaks are better than the troughs, but the general approach seems to be that cycles will happen, and that the perspective to take is the longterm view.

The one thing that does put an irritating spanner in the works, though, is uncertainty. I discussed Donald Trump’s steel tariffs at Promat earlier this year, and the conclusion was that although the effects hadn’t necessarily been what had been intended—rather than making US steel cheaper in comparison to imports, they allowed US steel manufacturers to increase their prices in line with the tariffs—the industry could handle the change.

What the supply chain found difficult to manage, though, was the uncertainty—the tariffs were changed shortly afterwards, creating confusion and hesitation amongst suppliers, manufacturers and customers. The planned purchases and the orders in the pipeline would still go ahead—but only once the terms had been settled with a greater degree of certainty.

Over here in the UK, uncertainty is the order of the day, and indeed the year so far. I spoke with three UK companies in the lifting industry for this issue, and asked what impact Brexit was having on their business, and the answer was that it has put a temporary hold on many orders, as customers wait for confirmation of the direction the UK will take in terms of its relationship with the EU.

And so, while the British government continues to open red boxes seemingly at random to discover if the country will have a ‘Deal or No Deal’, industry is not too badly damaged, only frustrated.

The good news, however, is that there’s a more positive outlook for the long-term. One industry member, as you’ll read in this issue, commented that although there will certainly be some change, it could give UK manufacturing a boost.

When faced with the Doomsday scenarios posited by the newspapers, such as Britain running out of medicines and food within two weeks of the transition date, it’s good to be reassured by a more positive outlook. Whatever happens, it’s guaranteed to be interesting—unless you have to hear about it every single day, of course.