Brexit and the uncertain future for the UK apparel industry

“Brexit” is everywhere: TV, radio, press, street talks, at home… We are constantly seeing endless debates about its potential repercussions; there are many opinions, but the same question arises in everyone’s mind: ‘What is going to happen after Brexit?’

Jean-Claude Juncker, the President of the European Commission, has said today that the general election, scheduled for 8th June may delay the Brexit talks, which has been denied by No 10. In the meantime, Teresa May seems to be already looking for new trade deals with countries outside the UK such as United States, whose president, Donald Trump, seems very interested in strengthening the economic links with UK once we have left the European Union. However, these trade talks with third countries could undermine the British efforts to negotiate a favourable Brexit Deal. What should we prioritise? Can we achieve both things at the same time? Brexit is clearly surrounded by uncertainty.

The UK manufacturing sector and especially the apparel industry are not the exception. According to the Office for National Statistics (ONS), EU migrants make up 11% of the manufacturing workforce and the percentage increases for the apparel manufacturing industry, the sector with the second highest share of non-UK workers (34%). To add to this, studies reveal that non-UK workers tend to work more hours and are more likely to be overqualified for their jobs, their role in our industry not only seems important, but essential. The new governmental target of reducing the annual net migration (273,000 last year) to below 100,000 and its plans to change how migration is managed after Brexit, not only jeopardises these jobs but also the UK apparel manufacturing efficiency, productivity and competitiveness.

For the moment, the latest data showed a slowdown in the manufacturing output in March, but it was the first time in 9 months in which the increase in UK manufacturing production slowed. Nonetheless, we cannot forget about the growing rise in production costs driven by the pound depreciation. Importing raw materials now has become more expensive and consequently vending prices are being pushed up; in fact, price pressure is close to reach record highs. On the other hand, companies with a huge client-base abroad have benefited the most, even increasing their turnover, and working with English suppliers has been identified as a way to avoid the drawbacks arising from the Sterling depreciation.

Among this uncertainty, however, we find that the confidence in the UK manufacturing sector keeps rising and the outlook for the industry remains positive in general; even the Sterling seems to start reflecting this perception. We should not forget that if we are in or out of the EU or if we are able to sign new trade deals or not, we all are British citizens. What does that mean? It means that we must truly believe in the potential of our people, our manufacturing industry and in the “Made in Britain” proposition as a synonym of quality, desirability and great ethics. Remember: “The moment you doubt whether you can fly, you cease for ever to be able to do it.”

By | 2018-04-08T16:24:35+00:00 April 20th, 2017|Industry News, Made in the UK, Manufacturers|0 Comments