Swindon & Wiltshire Business News

Businesses hit hard by Brexit, say Chambers of Commerce in region

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Businesses have been hit hard by Brexit, according to research by an affiliation on Chambers of Commerce in the region.

A survey of nearly 600 businesses was conducted by British Chambers of Commerce South West, which includes the Swindon and Wiltshire initiative, part of Business West, as well as chambers representing Bristol, Bath and Gloucestershire, Cornwall, Devon, Dorset, and Somerset.

More than half (53 percent) of the businesses that responded to the survey said they had been impacted by the new UK-EU Trade and Co-operation Agreement, compared with 22 percent who recognised no change.

The balance of international sales and orders reported by exporters has also fallen to historic lows in the manufacturing sector and remains strongly negative across all sectors – at minus 28 percent of export orders and minus 22 percent of export sales for manufacturing and minus 33 percent for both export orders and sales for services businesses.

Firms highlighted a number of significant ‘adjustment problems’ that created problems for their operations, including unclear government guidance and general business confusion, logistical difficulties, additional VAT obstacles, a breaking down of trust with customers and general worsening of trade conditions.

Delays at the border, a lack of capacity within logistics firms and unfamiliarity with new paperwork were all common complaints.

Traders laid blame for logistical and paperwork issues on both sides of the channel. In addition to a hold up in shipments, businesses expressed anguish at the increased cost burden of trading with the EU since the trade deal came into effect.

Nearly half (47 percent) of exporters predicted that trade with the EU will decrease, compared with just three percent who thought it will increase, and 32 percent who predicted it will remain the same.

And challenging predictions of a UK-global trade boom post-Brexit, only 11 percent of exporters felt that the TCA would increase their sales in non-European export markets, with a further nine percent of exporters saying that it would harm global exports.

Commenting on the findings Stuart Elford, chairman of British Chambers of Commerce South West, said: “Our survey demonstrates the very substantial impact of Brexit on local exporting businesses.

"This backs up the official national data that our exports to Europe have had a major short-term shock.

“Apart from the first impact of the global pandemic seen in Q2 2020, our latest survey results on manufacturing exports sales and orders are the worst in the South West since the global financial crisis of 2009.

"Services exporters sales and orders has been under significant pressure throughout the pandemic, but remain very weak when compared to our South West business surveys over the past thirty years.

“Some of it is hopefully short term – with firms being hit by both Covid and Brexit disruption.

"This has been exacerbated by the lack of any meaningful time to adapt to the new Brexit rules and the high level of disruption in export logistics and at Dover.

"However, many firms are reporting losing customers and trust among their European buyers, as extra costs and obstacles make it harder to compete in this market.

“Worryingly for the region, many more exporters think they will see a fall in European exports than is made up for an increase in exports to the rest of the world.

"Businesses and government will need to work much harder to make Global Britain a reality, with more investment in helping firms break into alternative markets now vital.

“A common exporter complaint is also excessive or incorrect application of the new rules by European customs agents alongside frustration at lack of clarity from the UK government.

"We hope the UK government can use diplomacy to reduce the level of current frictions being applied in Europe.

"We can’t afford to let a bad start to the year cement itself into permanent damage to the UK.”