Engineering in the post-Brexit future

Engineering post Brexit

With Brexit making headline news across the world, we’re left wondering what lies ahead for the UK engineering market post-Brexit?

With businesses across the UK unsure how the post Brexit future will affect them in terms of trade with the EU and the rest of the world, the engineering sector stands to potentially benefit from Brexit. With the UK leaving the single market, this leaves the opportunity to establish new trade deals with the rest of the world. Currently, the engineering sector contributes to 10% of the British economy, this figure is predicted to increase to a potential 20%, equalling a potential £280 billion post-Brexit.

The post-Brexit job market

As we edge closer to Brexit concerns mount over potential skills gap within the UK engineering market. Although we can benefit from increased opportunity in terms of jobs for UK citizens, there is no denying there will be a shortage of qualified workers to fill the roles within this sector. Currently, 15% of the jobs occupied in the Engineering sector is occupied by EU workers. For the UK engineering sector to remain a global competitor,  increased investment in programmes such as STEM is required to encourage young people into the field. Although a skills gap presents opportunity for those already in and newly entering the sector, businesses may need to search further a field to fill the void that will potentially be created post-brexit.

Following Brexit, UK based businesses will not be able to hire EU workers as easy. This could also be problematic for British based engineers eager to work abroad in EU countries, having to go through strict immigration procedures in order to access jobs. Some UK based engineering firms have already made plans to move their headquarters to EU countries, particularly Germany. This could prove detrimental to the UK market.

With the engineering sector currently hiring 2.7 million workers within the UK, the movement of major companies could lead to increased out-migration and cause a greater problem by “siphoning” off skilled workers currently based in the UK. With the potential of a nodal Brexit on the cards, a report carried out by the EFF found that 30% of UK based companies are expecting to find it more difficult to recruit workers that are qualified to fill the roles in the companies post Brexit. With 83% of the 500 companies surveyed saying that they are not prepared for a no deal Brexit and a further 43% saying they will not be preparing in advance.

Trade tariffs on UK based companies

Should the UK leave the single market union, trade uncertainty will mount between the UK and EU countries, with businesses currently enjoying trade without any tariffs. In the event of a trade deal it is likely that tariffs will be introduced. Currently, manufacturing companies such as ‘airbus’ rely on the smooth flow of both goods and people. Airbus currently make 80,000 employee trips to the EU each year and exports in upwards of £6 billion worth of goods. Although companies like airbus cannot fully prepare for the impact of Brexit, they can plan how they will react to changes in the market should they occur. Companies need to look into their current manufacturing and distribution routes. Should any tariffs come into place, they need to be able to adapt to maintain  company profitability.

Many companies are preparing to move all manufacturing to EU countries to avoid these tariffs. CEO of Magal Engineering said he is forced to think about the future of his company and the potential of moving production to factories in France and Germany in order to avoid the tariffs and border checks that may be brought about as a result of Brexit.

 

Brexit may pose great opportunities to individuals in terms of career development, but it leaves businesses facing many challenges that will need to be overcome in order to survive and succeed in the engineering sector. Although plans are being implemented for every scenario, one thing is clear for certain and that is that no one will know what the post-brexit market will look like until the time comes.