U.K. suppliers could lose a lot of business from their EU corporate clients, according to a new survey by the Chartered Institute of Procurement & Supply (CIPS).
As reported in The New York Times on Monday (Nov. 6), the CIPS survey found that 63 percent of non-British EU companies say they plan to remove at least part of their supply chains from the U.K. That’s a nearly 20 percent increase from a May poll.
A fifth of U.K. companies told CIPS they are struggling to strike deals with their EU corporate customers that will last beyond March 2019, when Brexit will occur. Further, nearly two-thirds said fluctuations of the pound have led to increases in U.K. supply chain management costs.
The data could fan the flames of existing fears that Brexit will cause massive disruptions to businesses in both the U.K. and Europe if no trade agreement is reached. According to the CIPS survey, even if policymakers make headway in discussions, some U.K. businesses have apparently already lost a chance to stay connected to their EU clients.
“British businesses simply cannot put their suppliers and customers on hold while the negotiations get their act together,” said CIPS Group Chief Executive Officer Gerry Walsh in a statement, the NYT reported. “The lack of clarity coming from both sides is already shaping the British economy of the future — and it does not fill businesses with confidence.”
CIPS’ survey was released just weeks after Bibby Financial Services published its own research into small businesses’ (SMBs) expectations over a “hard” versus a “soft” Brexit fallout, with a soft Brexit meaning the U.K. and EU will be able to secure a trade agreement.
More than a third of SMBs said they expect the U.K. to take a hard Brexit and complete the transition outside the EU before reaching some kind of trade deal; about the same amount, though, said they have confidence policymakers will be able to secure a trade agreement in time.