The economy had seen a sudden growth in the run-up to the proposed March date for the UK leaving the European Union, as manufacturers stockpiled parts, raw materials, and goods in the anticipation of holdups at the border. After the Brexit deadline was extended to October, it suffered the reverse effects as these supply reserves were used up and fewer purchases were made. The hangover followed UK’s original exit date which proved to be stronger than anticipated, said Yael Selfin, chief economist at accountants KPMG UK.
Factory shutdowns designed to cope with disruption from a March Brexit slashed UK car production in April by nearly half, the industry said last month. BMW’s Mini factory in Oxford brought forward its summer maintenance shutdown in April to minimize any disruption surrounding Brexit. Other manufacturers’ annual stoppages were also brought forward.
The car industry brought forward its annual shutdown – which is usually used to put in new equipment, prepare for new models, etc. As a result, car production fell off a cliff and manufacturing as a whole fell by nearly 4% in just one month. Growth may bounce back, but then Brexit is now scheduled for October 31. How do companies plan for that? Repeat the whole operation again or not bother? Certainly, the car industry won’t want another shutdown, it has already had one this year and Brexit could still be delayed again.
The Society of Motor Manufacturers and Traders (SMMT) has estimated car production for the whole of 2019 will be about 10% down from last year. It says the market might pick up by the end of the year if there is a favorable deal between the UK and the EU, and a substantial transition period to adapt to trading outside the single market. But it has said a no-deal Brexit will make the declines worse with the threat of border delays, production stoppages, and additional costs.