More on Brexit – From Our Colleagues at Spend Matters US

It is interesting to see what people outside the UK are making of our decision to leave the EU following last week’s referendum. Nigel Farage has been making himself popular at the European Parliament – popular with Marine Le Pen, of the French National Front, if no-one else.  European newspapers are reflecting the shock that many of us here feel, and of course the defeat of the England football team, plucky underdogs who just could not withstand the full might of the all-powerful Icelandic Empire, has been greeted with what only can be called unalloyed delight. Schadenfreude, we might say.

Anyway, a view from across the Atlantic comes from our colleagues at sister websites Spend Matters and Metal Miner, including Jason Busch, pictured here. They highlight half a dozen immediate areas of interest, some of which are predictable, such as currency and commodity price implications, but some are less obvious.

For instance, here is one point that might bring some hope for the UK – might we become a “low cost sourcing country”? Maybe not to rival Thailand just yet, but here is the Spend Matters US view.

 

“Welcome to the UK: A New Lost Cost Country for Clever Buyers  

Well, not exactly. But the weakness of the pound could make the U.K. more attractive for sourcing efforts for global companies. However, given the death of basic industry in the U.K., it will be essential for smart buyers to separate out base material costs from value-added components, even offering to buy raw materials and commodities on behalf of U.K. suppliers given rising import costs for U.K. companies — or off of negotiated pricing schedules and potential demand aggregation programs and rebate structures tied to an OEM agreement.

Such a strategy could allow global buyers to take advantage of a weak pound while also shoring up their U.K. supply base from a risk management perspective. In short, look at the U.K. as a potential lower-cost source of goods if you can get clever with the raw material and commodity component of total cost”.

 

Our colleagues also point out that EU regulations – environmental legislation around the steel industry, for instance – have played a big part in killing off some of our basic industries. Might exit from the EU enable the country to revive some of those? We don’t want to go back to the worst of the polluting smoke-stack days, but might some judicious relaxation perhaps enable us to generate jobs and reduce dependence on imports?

A couple of positive thoughts there anyway, and do read the whole Spend Matters US article here.

First Voice

  1. JohnLandseer:

    So, whilst EU environmental directives have played their part in “killing” off our steel industry, we ourselves, that is the UK government has been zealot like in trying to out-do our European colleagues -.the cost to industry has been exorbitant with the consequent reduction in steel and other manufacturing capacity.

    Great to embrace global warming and everything green -.but, big but, let’s not tree-hug too much when our competition takes full advantage of our stupidity and kum-bye-yah nativity

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