Tuesday, 9 April 2019

Brexit: and not being complacent about the current strength of Devon's economy

Devon Live has been giving a few mixed messages over Brexit this last week:
Brexit? Don't worry about it and don't stockpile, council advises people in Devon - Devon Live
Pasties to be banned from EU after no deal Brexit - Devon Live
Devon and Cornwall Police need millions of pounds extra to deal with Brexit holiday makers - Cornwall Live
Fact checking claims that Brexit is to blame for upheaval of three of Devon's biggest brands - Devon Live

There could be business opportunities: 

Why Brexit could be good news for Devon suppliers

South West manufacturers plan to bring supply chain closer to home because of Brexit

Hannah Finch
11:40, 21 MAR 2019

A Devon luxury bed maker is shrugging off Brexit by keeping its supply chain super-local. Naturalmat, based in Topsham, has sourced its materials from Devon and the South West for the past 20 years and it has paid off during Brexit uncertainty.

Naturalmat source wool for their mattresses from organic Devon sheep farms. They pay a premium to get the right blend of organic wool from a variety of local breeds and this helps to reduce transport miles too. Yarn from the wool is spun in Launceston at Blacker Yarns and wood for the bed legs is turned by Lumber Decor and timber sourced from a sustainable Devon plantation.

Founder Mark Tremlett said: "We're not impervious to the slowdown across the retail sector in the UK since Brexit was announced but we are seeing a peak in our overseas sales. Since the referendum and subsequent drop in Sterling value, our products are selling internationally at a price now 15% cheaper than two years ago.

"Crucially, our supply chain has not been affected by Brexit. By buying locally, and paying British Pounds for materials, yet selling in other currencies, we've managed to leverage the weak currency market to our advantage. Provenance has always been important to us and continues to be so. We founded the business on these principles and the extra boost this business model has given us in a pre-Brexit market has been an unexpected bonus."

It comes as a new survey shows that South West manufacturers plan to move their supplier bases out of the EU - creating more work for the region’s suppliers.

The SWMAS Manufacturing Barometer survey has found that 16% of the South West’s SME manufacturers are now looking for suppliers in the UK to replace those currently sourced in the EU.

A further 5% are considering moving supply now sourced outside the EU to the UK.

Simon Howes, CEO of Exelin Group (encompassing SWMAS) said: “The desire to source new domestic suppliers indicates UK SME manufacturers are nervous about securing supplies post-Brexit, but this could provide a short to medium term boost for UK businesses if they can meet this need.

“This comes at a time when companies like Honda say they are moving production out of the UK, a move which will negatively affect their supply chain and create a hole in forward orders. Our research shows a much-needed chink of light with new opportunities coming to the market.”

The Manufacturing Barometer also explored manufacturers’ specific plans to stockpile – an intention that first came to light in the previous Manufacturing Barometer. Amidst the continued Brexit uncertainty, more than two thirds (71%) said they were using cash reserves to buy up and store raw materials and components.

“Stockpiling looks to be a popular strategy to try to head off Brexit uncertainty, but it is creating its own issues, including impacts to cashflow and reports of some suppliers’ stock levels running low,” added Simon.

Why Brexit could be good news for Devon suppliers - Devon Live

On the other hand, a Conservative South-West MP warns us not to be complacent, as reported by the BBC today:

  1. Devon MP warns of potential manufacturing sector downturn

    Hayley Westcott
    BBC News Online
    Theresa May is in Berlin where she's hoping to win the support of the German Chancellor for a further extension to Brexit.
    An EU summit on Wednesday will formally consider Mrs May's request.
    It comes as a Devon MP warns the local manufacturing sector may face a downturn once Brexit is over.
    Speaking in the Commons, Conservative Gary Streeter - MP for South West Devon - warned that people shouldn't be "complacent" about the current strength of the county's economy.
    Quote Message: I'm told that manufacturing output in Plymouth is holding up well but this is partly due to customers stockpiling because of Brexit uncertainty. It may result in a lack of demand once we get Brexit over the line - if we ever do." from Gary Streeter MP for South West Devon
    Gary StreeterMP for South West Devon
BBC Devon & Cornwall Live: 9 April - BBC News

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