Brexit fallout, rising costs prompt UK manufacturers to go increasingly local

Brexit fallout, rising costs prompt UK manufacturers to go increasingly local

British manufacturing firms, hit by soaring costs and the consequences of Brexit, are accelerating the “relocation” of their supply chains and increasingly turning to local suppliers, according to industry lobby Make UK.

In a study published on Tuesday, the organisation highlights in particular “relentless pressure on companies’ supply chains due to rising costs and geopolitical uncertainty,” causing “unacceptable” delivery times.

As a result, manufacturers continue to relocate suppliers, with 40% having done so in the past year and a similar number planning to do so in the next 12 months, the industry lobby said in a statement, confirming a trend unveiled in a previous report in May.

UK companies are also investing in technology tools to better manage their supplies and adjusting the number of suppliers they use, according to the organisation.

Rising prices of raw materials, transport and energy

Rising costs, particularly higher prices for raw materials, but also for transport and energy, are the main factor disrupting supply chains, Make UK notes in its survey.

Suppliers from the EU, and even beyond, are also less likely to supply companies in the UK, Make UK adds, citing “difficult political relations” between London and Brussels as one reason.

The issue is especially important as more than a fifth of the UK’s suppliers are based in the EU, according to the organisation.

Make UK’s chief executive, Stephen Phipson, is due to call in a speech on Tuesday for a “reset of the UK’s political and trading relationship with the EU” and an end to the “rancour and political chaos of recent years,” according to a separate statement.

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