A British vote in favour of leaving the EU would be a “lose-lose” situation for manufacturers in the UK and across the EU, according to a paper from the EU manufacturing association CEEMET.
The analysis warns that the impact of Brexit could trigger a downward spiral in UK GDP growth for industry, with the worst affected companies being medium-sized manufacturers in complex global supply chains.
The research, by Professor of economics Frédéric Gonand, of the University of Paris-Dauphine, commissioned by French employers’ group UIMM, is based on a detailed analysis of trends in manufacturing in the last two decades. It is a conservative estimate of the impact on British companies.
Professor Gonand said: “Our research is clear that the impact of Brexit could trigger a downward effect on annual GDP growth in industry of -0.5% over 15 years. However, the impact could be even greater as the analysis focuses on the industrial sector and doesn’t take into account the impact in the UK financial and wider services sector.”
Commenting on the paper, CEEMET Director General Uwe Combüchen, who represents more than 200,000 manufacturers across Europe, said: “The analysis confirms our concern about the implications of Brexit not just for Britain, but other countries in the EU. We think manufacturers in the UK and across Europe will be better served by the UK remaining a member of the EU.” He said that Brexit would risk a lose-lose situation for manufacturers across Europe, as well as in the UK.
“The academic review of the impact on economic growth in the UK is a cause for concern,” says Terry Scuoler, CEO of EEF, the UK manufacturers’ organisation, “In the forthcoming referendum British people will ultimately have to make a choice between the European Union - which although ripe for reform, is inextricably linked to UK’s prosperity as the fifth largest economy in the world - and the uncertainty and doubt of life outside the EU.”
“The EU must put in place measures and policies which drive toward the ambitious goal of bringing industry’s contribution to EU GDP from the current 15% to 20% by 2020”, said Mr Combüchen, “that’s why manufacturing employers are calling on EU leaders to support the drive towards a more competitive EU with 28 member states where businesses across Europe can thrive, grow, and employ more people. An EU grounded in the principles of Better Regulation, enabling growth, promoting trade and the concept of ‘Europe where necessary, national where possible’ must surely be our aim.”