No-deal Brexit threatens aerospace production

Factory output in Britain has taken a massive hit at the biggest rate in seven years, as the economic risks involving no-deal Brexit is rising significantly while the global demands are faltering. The monthly snapshot from IHS Markit and the Chartered Institute of Procurement and Supply showed that manufacturers toned-down production due to fading demands abroad and home.

New orders and output shrank significantly as factories were under pressure from the highest level of uncertainty over Britain’s future in trading relationship with the European Union and also from the US-China trade war, which has created a meltdown in international trade. Various factors have slowed down the production rate and the Global aircraft deliveries for the current year reached 716, which is 93 behind the pace that was set in 2018. Aerospace manufacturing did not see any notable changes in the first six months of 2019, except a spike in March that associated with stockpiling, following a 4.5 percent decline in 2018.

The aerospace sector spent almost £600 million in preparation before 29th March for Brexit, this figure will further rise as new preparations are being made for the UK that is set to leave EU in October without a deal. Significant short term disruption is expected from a no-deal Brexit and this will create a competitive disadvantage to UK aerospace. The government must set its focus on securing a good deal because border delays, cash flow crisis, and transport disruption might threaten many businesses if the EU is left without a deal.