Britain’s Aerospace Industry Declines On Brexit Uncertainty

 - February 11, 2019, 1:54 PM

Fears that Brexit would lead to a declining UK share of the global aerospace manufacturing industry became reality on Monday, as official figures revealed a 3.9 percent fall in output last year, only the second drop for Britain’s aerospace sector since the recession of 2008. The annual decline in the output of aircraft manufacturing proved even steeper at 4.5 percent, according to data published by the UK Office for National Statistics, and overshadowed the growth in maintenance, repair, and overhaul activities, which account for a smaller portion of the sector overall. In the preceding seven years to 2017, growth in UK aircraft manufacturing averaged 4.8 percent a year as the sector benefited from strong global demand and rising production rates.

“The real impact of Brexit uncertainty is now becoming all too clear: falling UK aerospace production, despite increasing global demand and a highly supportive national industrial strategy,” said Paul Everitt, CEO of UK aerospace trade group ADS. The major global aerospace manufacturers achieved a new annual record in 2018 for the eighth consecutive year by delivering 1,618 aircraft for an increase of 120 units, or 8 percent over the previous year, ADS noted.

“Many companies are clearly choosing to delay investment until our future relationship with the EU is agreed,” Everitt said. He called on the UK government and parliament to “act now” to avoid a no-deal Brexit and begin the process of rebuilding confidence in the UK as an attractive location for domestic and international manufacturing investment.

Last month, outgoing Airbus CEO Tom Enders issued his starkest warning ever on the potentially damaging effect of a hard-Brexit and the continual lack of clarity on the terms of the UK’s exit from the European Union. “It is a disgrace that, more than two years after the result of the 2016 referendum, businesses are still unable to plan properly for the future,” Enders said in a video message on the company’s website.

Britain’s multibillion-pound aerospace sector, a world leader for a century, stands “at a precipice,” he warned. Airbus cannot immediately pick up and move its large UK factories to other parts of the world, Enders admitted, while stressing the long-term nature of the aerospace business. “We could be forced to redirect future investments in the event of a no-deal Brexit,” he said. “And, make no mistake, there are plenty of countries out there who would love to build the wings for Airbus aircraft.”