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Britain’s world-leading aerospace industry risks losing investment and will face supply chain problems if the government fails to negotiate a Brexit deal which maintains the current strategic relationship with the European Union, according to a new report from the Institution of Mechanical Engineers.

The UK aerospace industry generated £35bn in turnover in 2017, with £30bn in revenue from exports which grew 39 percent between 2012 and 2017. The sector employs over 120,000 people, many in highly skilled engineering roles.

The research found that the movement of skilled workers, access to engineering resources and the freedom to trade with customers, group companies and suppliers across the EU are key factors behind decisions to invest in the UK.

“The effect of Brexit and a “no-deal” scenario would be felt in the long run and would impact future investment decisions,” said the report “UK Aerospace: The Impact of Brexit”.

The industry, which is highly specialised and dominated by multinational companies, depends heavily on participation in European and global supply chains.

If the UK leaves the EU without an appropriate deal in place, then aerospace companies will face supply chain disruption and higher manufacturing costs if imports from the EU are subject to tariffs and restrictions.

If restrictions are placed on the movement of people and goods, these will create logistical problems for many companies due to a lack of readiness, as well as the cost and delay resulting from additional customs and immigration checks. These factors will increase the time it takes to manufacture products, raise operating costs and hamper the UK sector’s global competitiveness, the study concluded.

“It is important that the UK aerospace industry is able to maintain its high value manufacturing, world-leading research and growing international trade without disruption,” said Colin Brown, Chief Executive of the Institution.

The report looked at the impact of Brexit across the sector, including the implications for research and development. Its recommendations include:

• The UK Government negotiates a Brexit deal that maintains the strategic partnership with the EU and the status quo. This will ensure that the UK continues to utilise the supply chain footprint and has access to a skilled workforce.

• The UK Government invests in research, development and innovation projects that focus on improving battery technology and the electrification of aircraft propulsion due to the significant upscale and potential of these areas to make the UK a world leader.

• The UK Government increases the availability of funds in the form of grants for UK SMEs to invest in digital and automated manufacturing machinery and training to improve output and quality. This will significantly increase the productivity and in turn, the competitiveness of the UK manufacturing workforce.

BlueSky Business Aviation News | 17th January 2019 | Issue #494