BREXIT – Impacts on the Electronics Industry!
For those who may not be aware, The United Kingdom held a referendum vote on its relationship to the EU back in 2016. With virtual guarantees that The United Kingdom would remain in the EU – it came as a shock that ‘leave’ won by 52% to 48%. The impact of the surprise vote caused lots of uncertainty with citizens of The United Kingdom and has caused industries to become very challenged. The UK could still leave with no deal if the withdrawal agreement is not approved by 31 January 2020.
How Has Brexit Impacted the Electronics Industry So Far?
The impact of the referendum vote caused the pound to drop dramatically. A weak pound is bad for us is that it makes everything we import from overseas more expensive. Therefore, importing electronic components into the UK is more costly. As you can imagine, this slowed down the electronic components shift. This affected distributors, suppliers and well as manufacturers simply because less people were purchasing the components.
Many UK based publishers have been widely affected due to global organisations not promoting their electronics in certain UK based magazines / websites due to the uncertainty.
How Will Brexit Impact on the Electronics Industry in the Future?
It’s difficult to predict the future on this matter as there is so much uncertainty. However, I believe that it will not only be more expensive to import electronics into and from the UK, but it will also be more time consuming. For example, the electronics industry across Europe were able to shift products throughout the EU borders without the need for custom checks. This was due to the ‘Freedom of Movement Act’ in 1993. However, if the UK officially leaves the EU, which is likely – there will be increased border checks which will impact both cost as well as time frames.
Not only this, many large companies have expressed concern about pursuing their operations in the UK. If these large companies were to transport their business / workplace elsewhere, this could cause dramatic loss in jobs as well as effecting our economy.
About jobs, the electronics industry has a need for highly skilled workers to ensure success and safety within the workforce. Many electronic labourers are sourced from overseas due to skill and work rate. With future uncertainty in place, we are not sure whether this will affect workers sourced from the EU.
What Can I Do to Prevent This Effecting Me?
In my opinion, I would suggest purchasing electronic stock from UK based manufactures to avoid costly import duties as well as shipping costs which may rise depending on the result of Brexit. I also would suggest avoiding purchasing / selling properties for the next year because according to Which.com, ‘latest data from HMRC, shows a dramatic year-on-year drop of 16.5% in the number of residential transactions in June 2019 (84,490).’ The drop-in transactions would entail that people are wary of purchasing / selling properties due to Brexit.
Overall, I believe that if The United Kingdom officially leave the EU, there will be a dramatic loss of jobs due to large companies moving their premises elsewhere. There may also be a decrease in the shifting of electronic components globally. This is due to UK residents purchasing lower quantities because of increased shipping cost / timeframes which can affect manufacturing jobs. All in all, I believe that Brexit will have a negative impact on the electronics industry not only UK based, but globally.
Did You Stockpile Because Of BREXIT?
According to the Guardian, UK manufacturers’ stockpiling for no-deal Brexit hit record levels. This is because there was a high concern that there would be border gridlock which would slow down the process of transportation of goods globally. The concern of border gridlock was caused by no-deal Brexit which led British manufacturers to increase their stockpiling efforts. Another quote from The Guardian, ‘Britons have spent £4bn stockpiling goods in case of no-deal Brexit’.
Over the last few months in the UK, Brexit has been the most talked about topic due to the uncertainty and frustration of what the future holds. The recent British vote resulted in Boris Johnson being elected as Prime Minister of the UK. With preliminary talks ongoing about Boris Johnson’s new Brexit proposals, the deal is ‘essentially impossible’ according to The Telegraph.
In my opinion, I think stockpiling prior to Brexit was a clever move as there was strong uncertainty on how the vote would affect the economy. Some of the products we’re accustomed to having all year round could be harder to come by or cost more to buy. So, it would have been a good idea to buy the items to be sure you have easy access to them and at a good price. However, in my opinion, I also think that this could have affected companies negatively. I believe this because they may have stockpiled high quantities of products and then may have not been able to shift them as much as they would like. This would have resulted in excess stock.
By Amy Leary, Marketing Manager at eBOM.com