The majority of manufacturers have done all they can to prepare for a no deal Brexit next month, one of the region’s top manufacturing bosses has said.
Nick Cragg, Master Cutler of Sheffield, said that a hard Brexit scenario is not wanted by most manufacturers in the region, who will face increased tariffs and delays in goods moving in and out of the country.
Speaking to The Yorkshire Post, Mr Cragg said that most firms did not have “endless resources” in which to prepare for a hard Brexit and that a no deal exit was “the last thing they want”.
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His views are made after it was revealed that British manufacturing contracted last month at the highest rate in seven years.
The latest Manufacturing Purchasing Managers’ Index showed a reading of 47.4, a full point lower than forecast and far off the 50 reading that is needed to indicate growth.
Mr Cragg, who will stand down from the role next month, said that much of the difficulty came from the fact that manufacturers were forced to liquidate vast amounts of inventory that it had stockpiled ahead of the initial exit date laid down in March.
“There was a lot of inventory laid down earlier this year ahead of an intended date which of course did not happen,” he said.
“From a cash point of view that had to be liquidated. You can just sit on a massive stock levels forever, particularly when the end date was not to be. That has had an impact in terms of activity levels upstream. The result is the end of the year turned into a more difficult time.”
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Mr Cragg said that South Yorkshire manufacturers were finding it virtually impossible to negotiate contracts owing to a lack of clarity on what future post-Brexit tariffs may look like.
“It is a very difficult thing to predict where we are going right now,” he said.
“A lot of our companies are SMEs, they do not have vast resources to plan for endless scenarios. The SMEs roll their eyes into the back of the heads and say we have probably done as much as we can do. What they want at the end of the day is an end to uncertainty. The vast majority of businesses do not want a hard Brexit. That is the last thing they want.
“And I accept that there are some who will say ‘it really does not make a hill of beans difference to us’. But let us talk majorities, numbers of people employed and the families who depend on that unemployment. The uncertainty of coming up to a red line at the end of October is really quite alarming.”