Impact of Brexit on Manufacturing Industry - Managerial Finance

Running head: MANAGERIAL FINANCE
Managerial Finance
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Introduction
The current study helps in understanding the effect of policies of BREXIT on particularly
manufacturing industry. The macroeconomic impacts of Brexit both during the short and long
term can aid in comprehending insinuation of the same that subsequently can help in
understanding overall gain or else loss. The section at hand elucidates therefore elucidates in
detail about impact of the policies of Brexit with special emphasis on a specific industry that
is manufacturing industry (chosen for the study).
Impact of Brexit on manufacturing industry
Brexit can necessarily be the impending withdrawal of the United Kingdom from specifically
the European Union. In a particular referendum, it was mentioned that around 51.9% of UK
electorate voted in favour of leaving the European Union. Also, the rate of turnout was
recorded to be 72.2%. As suggested by Danielson et al. (2016), there have been several
attempts to frame macroeconomic insinuations of particularly the Brexit, approximately all of
which indicates that there is a long term loss of gross domestic product for the economy of
UK in comparison to status of specific quo projections of staying entirely in the EU as well as
single market. In the context of macroeconomics it can be hereby said that loss of GDP lead
to low level of employment. Demand from different other EU nations comprises of roughly
12% of particularly final demand for goods as well as services of UK and this necessarily
translates into roughly 3.3 million jobs (Gitman et al. 2015). Particularly, there are certain
segments of actions in which losses of job are likely and Brexit can enhance jobs. The direct
influence of Brexit can permit the UK to save on current disbursements into the budget of
EU.
Disruption is said to be enhancing exponentially in particularly the world of manufacturing.
Particularly, beginning from talent and technology, counting industry 4, to Brexit and latterly

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the election of Trump, there are several risks as well as opportunities. Uncertainty along with
loss of business confidence can be considered to be important issues presently facing
manufacturers of UK (Becker et al. 2017). The manufacturing output can be affected by
lower degree of accessibility to the market of Europe, even though some form of free trade
partnership is liable to be negotiated. Worldwide payments along with currency risk can
enhance. Several small manufacturing firms fail to realise that they have options to mitigate
risks of currency and shield trading profits by way of planning future currency earning and
expends.
In addition to this, the capability to enhance investment capital before vote during a climate
of uncertainty can be made harder. However, during the period of exit, the entire British
economy might perhaps not respond positively to separation from particularly Europe with
decreased burden of carrying specific member states (Evans 2016). The centre for economic
performance has predicted a loss of roughly 2.2% of gross domestic product in UK, founded
on remaining with an FTP and three to four times higher in case if the same cannot be
negotiated. In essence, a Brexit can be regarded to be a perilous gamble. Thus, in their own
words, the BREXIT can be considered to be a perilous game (Wadsworth et al. 2016).
However, it can be hereby said that there are necessarily very few number of leaders
operating in the financial as well as manufacturing industries who have officially recorded
about the belief regarding impending gain acquired from Brexit. Essentially, it can be
considered to be reasonable to suppose that there are major political parties that will unite on
this specific issue in a way they did on particularly Scottish referendum.
Brexit reflects a new strategic risk for diverse businesses that like other risk facets need to be
systematically analysed, managed and thereafter mitigated (Colantone et al. 2018). In
essence, manufacturers have the necessity to recognize the influences of Brexit on important
business actions across both office systems that is both front and back systems in the