Businesses in the South West have reported significant drops in exports to the European Union, with some saying they are moving their operations to the bloc amid rising costs and paperwork since Brexit.
A survey of 500 firms by the British Chambers of Commerce South West (BCC SW) found that more than half of exporters said they had been impacted by the new 海角视频-EU Trade and Co-operation Agreement (TCA), which came into effect in January.
Many voiced concerns for future growth and competitiveness, with nearly half (47%) of exporters predicting that trade with the EU will decrease, compared with just 3% who think it will increase and 32% predicting it will remain the same.
READ MORE: {}
Meanwhile, only 11% of exporters felt the TCA would lead to an increase to sales in non-European export markets, with a further 9% of exporters saying that it would harm global exports.
Companies cited a number of ‘adjustment problems’ since the change in trading relations, 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.
Exporters in the manufacturing sector reported that international sales and orders had fallen, to (-)22% and (-)28% respectively while the export orders and sales for services businesses stood at (-)33%.
The survey comes after data from the Office of National Statistics released earlier this month revealed 海角视频 exports and imports fell in January at the fastest level since records began.
Delays at the border, a lack of capacity within logistics firms and unfamiliarity with new paperwork on both sides were all issues commonly raised by surveyed firms.
Most Read
As well as a hold up in shipments, businesses reported an increased cost burden of trading with the EU since the trade deal came into effect.
David Daly, the founder of wristband supplier Makero from Newton Abbot, Devon, said, "Delivery into Europe has been affected, with lead times becoming much longer.
“My courier is now asking for both an export fee and has increased my pricing by 22%. This is a shocking increase and puts into question the viability of my EU business."
Something Different, an international wholesaler for the gift and tourist trade in Bridgwater, Somerset, said that it had decided to hold off from trade with the EU until conditions are clearer.
Alfred Van Pelt, the company’s managing director, said: “[The European] sides of the business have largely stopped.
“We continue to sell to all non-EU markets. Sadly, we have had to reduce the number of full-time staff from 19 to 11, and entirely stopped bringing in seasonal staff.
“Not just did Brexit cause an immediate drop in turnover and the need for redundancies, but also killed a massive growth opportunity of our business.
Don’t miss
“Our foreign investor had huge plans for the 海角视频 entity by becoming one of three European distribution hubs. This would have led to investment in warehousing staffing, IT and technology.
"This is now no longer on the cards as the only distribution that can be done from within the 海角视频 (cost effectively) is to 海角视频 postcode addresses.”
Other firms, including Bristol-based Eskimo Design, who create designer radiators and towel rails, stated they were moving parts of the businesses to the European mainland to avoid disruption to trade.
Phil Ward, managing director at Eskimo Design, said: “Prior to Brexit, we sold 30% of our product to the EU and imported roughly 50% of our raw materials from the continent.
“This is now impossible. One major supplier is considering pulling out of the 海角视频 completely. We're reviewing moving manufacturing operations to Poland to serve the EU market.”
Moving business to mainland EU "only option"
Paul Jayson, an investment broker that specialises in the sale of classic motorcycles, added: “The business has grown from a one-man band to creating seven further jobs in Devon.
“We were going to open a new plant, creating two more jobs with expansion plans to create a further four jobs over the next two years.
“The jobs we would be creating will now all go to a new mainland EU country where we will have to start a new company. Our only options to survive or thrive are to move the majority of our businesses to mainland EU.”
According to Stuart Elford, chair of BCC SW, apart from the first impact of the global pandemic seen in Q2 2020, the survey results are the worst the South West has seen since the global financial crisis of 2009.
Sign up for more business news straight to your inbox
Stay up to date with our daily newsletter, email breaking news alerts and weekly round-ups. To sign up, find out more and see all of our newsletters, follow the link here
Mr Elford said he hoped some of the issues would be "short term" – with firms being hit by Covid and Brexit disruption – and also suggested problems had been "exacerbated" by a lack of time to adapt to the new Brexit rules.
But he said it was "worrying" for the region that many exporters believed they would see a bigger fall in European exports than was made up for with 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," he said.
“We hope the 海角视频 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 海角视频.”