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How Brexit could affect UK Engineering, Manufacturing & Electronics Sector?

20/06/16 Adam Walker Director

Ahead of this Thursday's pivotal vote, whether you are for Brexit or remain still undecided, we ask how would Brexit affect UK engineering and manufacturing. Research suggests that if the UK votes to leave, there is bound to be a hesitant period of uncertainty whilst negotiations are made on how the UK will exit the EU. The recruitment sector could suffer with a loss of jobs and the UK’s economic growth could be significantly reduced. The Institution of Engineering and Technology, a trade body with 167,000 members, reported ‘British engineering is deeply integrated with global markets and companies. If Britain votes to leave the EU, the period of uncertainty about the terms on which access to these markets would be granted would be a threat to the sector.’

From a British manufacturing perspective, the arguments for remaining in the EU are strong. Data from ONS – The Office for National Statistics reported that engineering output has increased by 42.5pc since 2010. Car production has increased by 60pc since 2010 and created 16,000 jobs. Correspondingly, the EU still remains as the biggest single market in the world with 500 million people and to remove the UK from such a substantial ‘solitary manufacturing community’ would be unwise. It is the biggest manufacturing export market, and it provides a foundation for UK engineering and manufacturing companies to export to the rest of the world through EU trade deals.

Furthermore, the UK benefits immensely from Foreign Direct Investment, which is due to the UK’s membership of the European Union. Looking to the future, if the UK exits the EU, it would no longer benefit from EU technical and engineering grants, which the UK continues to rely on. To lose free access to such a technically innovative and wide ranging market does not seem practical for UK’s engineering and technical sectors.

Likewise, the UK’s electronics and electrical sector is a thriving part of the UK economy. Brian Holiday, Chairman of ESCO - The Electrotechnical Systems Council comments: ‘As a sector, we represent 6.8% of the total UK economy and employ more than 1.16million people. We benefit from EU membership in terms of straightforward access to what is our major trading partner, from having a wider base to recruit from and because of its positive impact on innovation through research funding and programmes.’ To support this, a recent opinion poll conducted by IMechE – The Institution of Mechanical Engineers found that 56% of its members supported the UK staying in the EU. 27% stated they wanted to leave, whilst 17% still remain undecided. It is evident that the majority of mechanical engineers continue to support the UK remaining in the EU.

Adam Walker, Redline Group Director comments: ‘Facts are being thrown around on the UK Referendum and we believe that not enough is being said, or discussed, in terms of what impact a Brexit would have on the Electronics and Technical recruitment industry. As a UK based Engineering and Technical specialist recruitment company, we believe the Government needs to remain focused on the key engineering and manufacturing issues, whatever the result. The most persistent problem is education and the skills gap at all levels which will continue to hamper growth of the Engineering, Technical and Manufacturing Recruitment sectors. The UK needs to ensure it improves access to markets and candidates with the right skills for the engineering, manufacturing and electronics jobs arena whilst ensuring open access to foreign investment. Overall, a vote for Brexit could plunge Britain’s engineering and manufacturing industry into ‘crisis’ by cutting off vital research funding and exacerbating the shortage in skilled workers, as companies could face barriers to recruiting engineers from other EU countries.