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North West manufacturing particularly at risk from ‘No Deal’

Fresh analysis of the possible long-term impacts of a ‘No Deal’ Brexit suggests the North West could be one of the most exposed UK regions, especially for its automotive and chemical sectors.

The analysis, published by the CBI (Confederation of British Industry), includes real-world case studies of companies in every UK region. 

According to the research, the North West could face an annual loss of £20 billion by 2034 in the case of no deal. Only London and the South East face a bigger potential loss. 

The North West economy is more reliant on manufacturing than any other UK region and 49 per cent of its manufacturing exports are currently destined for the EU, the CBI said. 

The analysis shows that Cumbria’s exposure to Brexit is the highest in the UK, with Cheshire and Lancashire following close behind. 

The risk of higher tariffs, border delays and administrative costs are a particular risk for the automotive sector. For example, the CBI predicts that every completed component in a car could have to be tested twice over before being sold under a no deal scenario.

Firms in the pharmaceutical, chemicals, rubber and plastics sectors are also facing significant risk because of regulatory disruption. 

One SME manufacturer of speciality chemicals in the North West told the CBI: 

"We rely heavily on EU suppliers for our raw materials, and EU customers form a large part of our business. We have competitors in the EU, and it is critical we can remain competitive on no worse than level terms post-Brexit. If not, we simply play into the hands of our European competitors.

“A 'no deal' scenario leaves uncertainties in our ability to trade from the UK competitively. Without frictionless, tariff free trade and a consistent regulatory framework, it is difficult to see what advantages there are to manufacturers in the UK

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