Lack of clarity on the UK’s long term relationship with EU is clouding supply chain decision-making beyond March 2019, the date the UK will formally break relationships with the EU.
As per a survey, 1 in 7 business from EU countries which have a presence in Britain have moved parts of their business out of the country citing concerns of disruption of their business because of Brexit.
As per the survey conducted by the Chartered Institute of Procurement and Supply (CIPS), 14% of EU firms with assets in Britain, including warehouses, offices and factories, have scaled back their operations in Britain.
Further, 11% of those surveyed have already moved some of their workforce out of the UK following its Brexit vote in 2016.
According to John Glen, an economist with CIPS, the majority of the companies surveyed were worried on the lack of clarity regarding the long-term relationship between the EU and Britain.
“There comes a moment when companies need to put contingency plans into place,” said Glen. “We need to start getting real about what will actually happen.”
Incidentally, the survey also threw up the information that one in four British firms who have suppliers in the EU, are facing difficulties in procuring contracts beyong March 2019.
Further, one third of the respondents have raised their prices due to Brexit.
“Businesses have little choice but to pass on some of their rising costs to consumers in order to protect their profit margins,” said Glen.