5 Industries Holding Their Breath On Brexit

Whilst there is a view that Brexit will be a good thing for British businesses in the long term, there is no getting away from the fact that the short term is not as clear cut. Many industries are worried about the aftermath of us leaving the European Union and what that could mean for their own businesses, especially with the prospect of a no-deal Brexit looming ion the horizon. We’ll take a look at 5 industries which could be the hardest hit following Brexit.

1. Pharmaceuticals

The main worry within the pharmaceutical industry revolves around the regulation of new drugs. Many of the new drugs that are created by the UK pharmaceutical industry are regulated by the European Medicines Agency (EMA). This regulatory body has already moved from London to Amsterdam, following the result of the Brexit referendum but how will the final split with the EU affect the regulation of new drugs? We do have our own regulation procedures but they are known to be much slower than the EU regulatory procedures. Brexit would mean that new procedures for regulation have to be created and quickly if we are to get new drugs onto the market when needed.

Brexit poses a very big threat on the pharmaceutical manufacturing and research in the UK and it is potentially driving up its manufacturing costs and is deterring from the investments in future. Many companies have frozen all the manufacturing investments. A lot of other drugmakers have also announced some plans to chose the UK packaging or manufacturing sites by 2020. These decisions were given after the referendum in June 2016 and the companies told that they are not linked to the Brexit. Some companies will not be making any investment until there is clarity.

2. Automotive

Our automotive industry was thriving but Brexit has already started to take its toll with some manufacturers already moving out of the UK. We export 8/10 of the cars made in the UK, with 51% of those exported ending up in the European Union. If new import tariffs are introduced when we trade with the EU, it could well be catastrophic for this industry.43 percent of the industrial companies of Germany believe there will be a very hard brexit when UK will exit the European Union. Even three fifth of the industries polled that with the hard brexit they will really get affected which depends on how the production chains in the European Union and Britain are intertwined.

Annually around 85 million people are registered every year and out of this 2 million are in the UK. The car sales of the nation will get weak with Brexit but not that in a very drastic manner. There can be some supply problems in some plants which can also affected the subsidiary Vauxhall which now belongs to the French group PSA. Its faclility has been closed but its production is continued in Liverpool. An auto industry expert said taht BMW will be affected the most and it has its plan of engine production in Birmingham which creates the motors for the minis as well as cars.

3. Courier and Logistics

After Brexit, it might become more difficult to send a parcel to the EU. Certainly, as we navigate what splitting with the union means, we can expect slower parcel delivery times due to items spending longer in customs. There might also be a reduction in the number of parcels sent both into and out of the United Kingdom as goods become more expensive due to import taxes. This will all take its toll on courier and logistics companies within the UK.

4. Airline sector

Airlines will have a big planning exercise on their hands as they will have to rethink their routes across Europe in order to comply with EU laws. We currently enjoy access to the European Common Aviation Area (ECAA), which allows us to operate commercial flights throughout Europe without restriction. We could well lose this right when we leave the union, which means we will have to quickly negotiate new flight paths at untold costs to the aviation industry. The regulation will also have a challenge on the aviation too. The hard brexit will also have the potential to cripple the flights as the British airlines may lose its right to fly to the airports in the European Union. This will also hit easyjet, Ryanair and the British airways. But also the condor and tuifly of Germany in which there is a major stake of the British shareholders. But there are also experts from Deutsche bank are optimistic as he says that it is very easy to solve the problem in such a way that will ensure the operation of the routes of flight between the European mainland and United Kingdom.

5. Financial Sector

We have already seen stocks and shares in the UK take a hit following the result of the referendum and at key points in the delivery of Brexit. Why will happen when we finally split with the EU? Many are worried about what losing access to the single market would mean for the UK banking sector. This would mean that tariffs would have to be paid where UK banks operate in the EU. Essentially, it could make them less competitive amongst European banks who won’t have to pay these fees and could result in them losing business. All the financial institutions are also watching the procedures of Brexit very closely as it accounts for around 12 percent of the United Kingdom’s GDP. The main financial hub of Europe is UK but the banks which are not based in Europe and are based in Britain doing businesses with EU cannot do so-post Brexit. Moreover, from this Frankfurt has been very profiting from it and it is estimated by them that the banks might relocate between $857 billion. Even around 8000 positions will move to the Frankfurt in the next couple of years.

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