January 29, 2022

Beyond Going Long

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British producers fear new customs bureaucracy and higher prices

British producers fear new customs bureaucracy and higher prices

LONDON, Jan 10 (TASR) – Brexit has hurt British companies, slowing their growth. They also have problems with staff retention and higher inflation-related input costs. This was demonstrated Monday by a survey conducted by Make UK, which represents 20,000 manufacturers of all sizes across the country, and by PwC.

However, UK producers are optimistic and expect business conditions and productivity to improve this year.

According to the survey, up to 73% of British producers believe conditions in this sector will improve and 78% expect at least a slight increase in productivity in 2022.

But at the same time, two-thirds of respondents complained that Brexit has slowed their business in the nearly two years since Britain left the European Union. They also have problems with employee retention and high input costs. At the same time, they fear more bureaucracy regarding new customs regulations, which could cause even greater delays in supply chains.

One year after the end of the transition period, more than half of the companies warned that this year they are likely to be hit further by customs delays due to changes in import controls and changes to product labels. According to them, delivery delays and bureaucracy will be among the biggest challenges facing companies this year, complicating their recovery from the novel coronavirus pandemic and adding more difficulties to the mounting costs they face.

A separate survey revealed that the number of British producers raising prices reached their highest level in at least two decades last month. October statistics showed that production in Britain’s manufacturing sector was still more than 2% lower in October 2021 than it was before the pandemic.

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Statisticians predicted that over the whole of 2021, production increased by 6.9% and in 2022 they estimated its growth by 3.3%.

About a third of companies surveyed want to change their supply chains and rely more on local resources after serious problems last year with the supply of components and materials from abroad.

According to Make UK, despite the difficulties these changes will bring in the short term, this shift could mark a potential end to so-called just-in-time delivery (at a specific time when used immediately without the need for warehousing).