Manufacturing firms in North stockpile in case of a no-deal Brexit

Manufacturing firms in the North are already stockpiling supplies as the prospect of a no-deal Brexit increases and "escalating" plans to make investments elsewhere, industry leaders are warning.

A survey on Thursday suggests more manufacturers in Northern Ireland now believe Brexit will have a negative impact on their business and on their ability to recruit people with the skills they need.

The survey, conducted by industry group Manufacturing NI and law firm Tughans, highlights that while the manufacturing sector enjoyed positive growth, sustained profits and grew its overall workforce during 2018, the uncertainty surrounding Brexit is casting a shadow over its immediate prospects.

Stephen Kelly, chief executive of Manufacturing NI, said: “A year ago 21 per cent of businesses could see Brexit as being a success. This has now sunk to only 6 per cent. Very few are convinced of any of the arguments put forward, particularly those promoting a no-deal exit.

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“Half of firms say that Brexit is already having a negative impact on their business and two-thirds say that it is a barrier to growth. These are people who understand the practicalities of trading in markets at home and abroad.”

Meanwhile also in Belfast on Thursday, the chief executive of the ADS Group, the UK industry body representing companies in the aerospace, defence, security and space sectors, also warned that the uncertainty surrounding Brexit was forcing companies to put costly contingency plans into play.

Aerospace

Paul Everitt said a no-deal Brexit would be the “worst possible outcome” and would expose all aerospace businesses, including many of the North’s major employers, to a “substantial risk”.

Mr Everitt was speaking at the “Growing the Aerospace Industry in 2019 – Challenges and Opportunities” conference at Titanic Belfast, where Northern Ireland businesses and suppliers got the chance to network with some of the industry’s biggest companies including Airbus, Bombardier and Thales.

He said the mood was upbeat “despite the headwinds of Brexit” and the concerns surrounding a no-deal scenario.

“The deal on the table may not be perfect but it is in the best interests of the UK’s aerospace, defence, security and space industries for the withdrawal agreement to be endorsed by parliament,” Mr Everitt said.

He said a no-deal Brexit would result in major disruption for the aerospace sector because of the highly integrated nature of its supply chain.

Bombardier, one of the North’s largest employers, has already warned that it may be forced to stockpile parts at a cost of £30 million (€33 million) if there is a no-deal Brexit.

The Canadian aerospace giant, which is in the process of axing nearly 500 jobs in Belfast, has a European supply chain of about 900 approved contractors, with more than 800 based in the UK and Ireland.

Farmer unions

Separately, the Ulster Farmers’ Union (UFU) joined the three other UK farming unions on Thursday to warn British MPs that a no-deal Brexit could have a “catastrophic” impact on the UK’s food and farming sector.

The UFU, National Farmers’ Union, NFU Cymru and NFU Scotland have written a letter to all MPs urging them to “take all the steps necessary” to avoid a no-deal Brexit.

The unions have warned that if the UK crashes out of the EU without a deal, it will result in huge disruption because of “an effective trade embargo on the export of UK animals and animal-based products”.

In the letter, the organisations said: “There is a very real risk that a disorderly Brexit will lead to an immediate reliance on overseas imports, produced to lower standards, while many UK farms struggle to survive.”

The warning by the farming union comes as latest economic forecasts suggest that the Northern Ireland economy could grow by 1.2 per cent in 2019 providing a “Brexit deal is reached”.

Danske Bank’s latest quarterly sectoral forecast report suggests economic growth in the North this year could be slightly stronger than last year when the economy grew at just 1.1 per cent.

Conor Lambe, the bank’s chief economist, said: “A range of potential Brexit scenarios remains possible, one of which is a no-deal Brexit. While considered an unlikely outcome, a no-deal Brexit, and the disruption that it would result in, is undoubtedly the biggest risk facing the UK and Northern Ireland economies at present.”