Rethinking the region post Brexit: The ongoing impact in Central South
Arbinder Chatwal at BDO looks at how the region is faring seven months after the introduction of the EU/UK Trade and Co-Operation Agreement
In the past 18 months the Central South has demonstrated remarkable resilience in the face of many challenges. In our most recent Rethinking the Economy research, more than a third of mid-sized businesses in Central South told us recruitment issues was one of their biggest barriers to growth, with an overwhelming 70% struggling to fill open roles. For some sectors, Brexit has compounded skills shortages they were facing even pre-pandemic.
Nearly half (43%) of leaders in the region have told us that Brexit-related issues will also hamper growth and the same proportion shared that the most immediate priorities for their business in the next three months is managing international supply chains in line with the EU/UK Trade Agreement. This is an issue which has consistently been very high on the agenda in our region. Last October, 80% of business leaders in the Central South said a no-deal Brexit posed a bigger threat than a domestic second wave of COVID-19, In this respect, the Central South region’s companies bucked the national trend in terms of concerns about a no-deal Brexit as regional business leaders across the rest of the UK consider a second wave of COVID-19 as a greater cause for concern than a no-deal Brexit.
The fact of the matter is despite gaining more certainty than businesses had in October, we are still effectively in a transitional period - and this has created ongoing issues for businesses.
The immediate impact on the import and export market at the start of the year was huge and also timed with a UK national lockdown. Export figures issued by the Office for National Statistics (ONS) recorded that UK goods exports to the EU fell by 40.7 per cent in January, while imports dropped 28.8 per cent. They were the largest declines since comparable records began in 1997.
Additional red tape and the imposition of customs duties and VAT have caused issues and despite positive headlines around trade deals such as the one with Australia, for many companies, it will not be until the effective transitional arrangements have been removed, that they will be able to see what life as a single market is truly like.
The good news is we are all learning lessons all the time and there’s a real appetite to invest for growth. The post-Brexit landscape may look different, but business leaders continue to impress by reinventing the way they work, manage supply chains and how they will attract talent in future.
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