Posted on Monday 27 August 2018 by Ulster Business
Manufacturing NI chief executive Stephen Kelly looks at how crucial the sector is for the Northern Ireland economy
Once again, the Ulster Business Top 100 Companies list shows how vibrant, successful and important our manufacturing sector is. Sales are up, exports are up, R&D investment is up and despite high profile casualties, jobs are growing meaning that one in four families in Northern Ireland still directly and indirectly depends on a manufacturing wage.
It also clear that many of the other businesses in the Top 100 depend on the sector for their success too. When manufacturing grows, the entire economy grows with it.
The remainder of 2018 and into 2019 will define the success or otherwise of the NI economy for the next decade as Brexit looms large.
More than a third of Manufacturing NI members, some 38%, said they were are planning on shifting production outside of the UK by developing their new facilities, making a purchase or creating new partnerships inside the EU.
Only 16% of firms were making plans to expand production or investing in sales development in the UK and outside of the EU.
More of our businesses, mostly SMEs, trade cross border than trade with the rest of the UK, but almost 60% of our external trade, by value, is with Britain and over 70% of our imports cross the Irish Sea.
A Brexit Border across Ireland or between these islands would harm the jobs and relationships, so it should not be accepted that a solution should be a choice of either. It is essential to focus on ways which ensure there will be no delays, hindrances, costs or over-burdening complexity which will threaten the future of the 214,000 families across NI who depend on a manufacturing sector.
Positioning Northern Ireland as The bridge rather than the border between the UK and the EU post-Brexit could see us prosper rather than being imperilled. This would finally transform for our economy by becoming one of the most attractive regions in the world in which to invest and create thousands of jobs.
Securing the critically important commitment from the Prime Minister that trade between NI and GB will be “unfettered” alongside the draft ‘backstop’ offer of continued membership of the EU’s Customs Union and access to much of the Single Market for Northern Ireland only begins to build that bridge. We have been offered the chance to not only have our cake and eat it but to make it too!
It’s good to have the security of being treated the same as others, but is also OK to be different if it offers the chance to really prosper? That is a hugely attractive outcome, but are we willing to grasp the opportunity?
The costs of Brexit will be borne by our manufacturing community through managing migration, origin certification, customs cost and delays and potentially tariffs and non-tariff barriers.
The head of HMRC’s estimate of one post-Brexit customs model would cost our manufacturers £400m a year, the equivalent of 20% of profits from the sector.
It’s increasingly clear that Brexit will add significant costs and complexity and it’s coming hurtling at us. Our manufacturers need to be compensated and our business environment made more cost competitive. If we don’t, the Ulster Business Top 100, in future years, will have a very different appearance.