Wednesday 13th Dec 2017 - Logistics Manager

Two thirds of EU businesses plan to drop UK suppliers

Some 63 per cent of EU businesses expect to move some of their supply chain out of the UK as a result of Brexit – compared to just 44 per cent of those surveyed in May.

The Chartered Institute of Procurement & Supply surveyed 1,118 supply chain managers for this latest survey, and the results reflect a significant decline in confidence that a frictionless trade deal will be agreed.

The survey found that 40 per cent of UK businesses are looking to replace their EU suppliers. That compares to 31 per cent of those surveyed in May.

The survey also highlights the problems now being created by Brexit. Some 64 per cent of UK businesses are suffering extra costs because of currency fluctuations.

One fifth of UK businesses are struggling to secure contracts the run until after March 2019. And 15 per cent of UK businesses have postponed or cancelled contracts because of the uncertainty over Brexit.

However, it also found that a quarter of UK businesses are investing more time to strengthen their relationships with valuable suppliers on the continent.

CIPS chief executive Gerry Walsh said: “The Brexit negotiating teams promise that progress will be made soon, but it is already too late for scores of businesses who look like they will be deserted by their European partners. British businesses simply cannot put their suppliers and customers on hold while the negotiators get their act together.

“While the TV cameras are fixed on Brussels, the deals which will determine the future prosperity of Britain and Europe are being struck behind closed doors in businesses large and small. The lack of clarity coming from both sides is already shaping the British economy of the future – and it does not fill businesses with confidence.

“The success of the negotiations should not be measured on the final deal only but on how quickly both sides can provide certainty. The clock is ticking.”