CIPS – strong signals of pre-Brexit woes

The Chartered Institute of Procurement & Supply (CIPS) has published research suggesting that 63% of EU businesses expect to move some or all of their supply chains out of the UK after Brexit. This compares to 44% in similar research in May.

The CIPS surveyed 1118 supply chain managers across the EU in this research. The results of the survey strongly suggest a loss of general confidence in the prospects of a frictionless trade deal.

At the same time, 40% of UK businesses are looking to replace EU suppliers as the drawbridge goes up both sides of the Channel. Only 31% were planning to do this in May.

Brexit is causing a lot of problems according to the CIPS. 6$% of UK businesses are suffering added costs due to currency fluctuations. Around 20% of UK businesses can’t secure contracts that run beyond May 2019. 15% of businesses have postponed or cancelled contracts due to the uncertainty of 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.”

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