Falling pound a mixed blessing for UK manufacturers
13 June 2019
Putting a positive or negative spin on the possible consequences of Brexit has become a national pastime – much of it driven by politicians of various persuasions trying to make capital out of the widespread confusion. Further fuel has been added to the flames by gloomy economists making grave predictions about Britain’s future outside of the EU and a media hungry for headline-grabbing news. Anecdotal evidence suggests that the majority of UK citizens are heartily sick of the whole Brexit circus and just want it all to go away.
Unfortunately, it’s not so easy for manufacturing companies like UnitBirwelco to escape just by switching off the TV. Our daily bread and butter comes from doing business with UK and international clients in the highly-competitive energy, petrochemical and utility sectors. The uncertainty is not helpful, to say the least, but the challenge is to adapt to the constantly changing circumstances.
One tangible consequence with which we have already had to deal is the fall in the value of sterling against the Euro and Dollar since the EU Referendum. As the BBC recently noted, back in December 2015 £1 would have bought 1.40 Euros; the current figure is around 1.13 Euros, which represents a drop of almost 20%. If you want to talk dollars, the pound has fallen by roughly 14% over the same period.
The exchange rate has obviously been great for visitors to the UK and so it comes as no surprise that those operating in our tourist industry have had cause to rub their hands together. It’s been pretty good, too, for UK exporters who source all or most of their raw materials in this country. But not so good if you make your living selling up-market German cars, or import more expensive materials and services from Europe or the US in order to manufacture products which you then want to export. The exchange rate can make a massive difference to competitive edge in tough markets.
As it happens, the recent shifts in exchange rates have been an overall positive factor for UnirBirwelco. However, I would also add that, while price competitiveness is obviously important, of much greater value is our reputation and the acknowledged expertise we have amassed in the specialist sectors in which we operate. The UK remains a good place to do business and we look to the future with great confidence.
By Cy Wilkinson