26th August 2016
ADS Group, the UK trade organisation representing the aerospace, defence, security and space sectors, has said that the UK's aerospace industry derives 90% of its turnover from exports. With £8bn of this relating to EU exports, new tariffs may have a significant impact on these exports, even if sterling values remain low.
Many businesses in the aerospace industry also rely on skilled workers from the EU. According to ADS, 7% of EU citizens in the UK – some 16,000 people – work in the aerospace industry. Therefore change to the freedom of movement of these workers may have a significant impact on the industry.
In the defence industry, sales to overseas governments and organisations may be affected but there is also a risk that domestic defence spend will reduce after Brexit due to the expected reduction in GDP.
Once the terms of the UK’s exit from the EU have been established, we will know more about the long-term implications. In our view, it is vital that businesses in the defence and aerospace supply chain have a robust Brexit strategy:
If you would like to discuss any aspect of this article, please get in touch with Kate Westbrook or your usual Thrings contact.