Status: 01/02/2023 12:01 p.m
Great Britain is becoming less and less popular as a production location. Local German companies certainly see opportunities in future industries. But the obstacles caused by Brexit are great.
The recession and the consequences of Brexit are also affecting German companies in Great Britain. A survey of future expectations gave a rather mixed picture, said the head of the German-British Chamber of Industry and Commerce (AHK) in London, Ulrich Hoppe, the dpa news agency.
However, Hoppe emphasized that the prospects for the British economy are significantly worse. “That has to do with the fact that the German companies that are here on the market are fundamentally more competitive and are therefore in a better position,” said the AHK boss. “But of course they also suffer from the fact that the economy here isn’t growing as it would have if Brexit hadn’t happened.”
Fewer German companies and a shortage of skilled workers
Around 2,500 German companies are active in Great Britain and employ around 450,000 people. According to a survey of a good two dozen German heavyweights by the German Industry UK association, they have been complaining about increased costs, more bureaucracy and delays since Brexit. Great Britain falls out of the top ten German trading partners for the first time in 2022.
Fewer German companies are also coming to Great Britain, although the country is doing well in two future-oriented industries with offshore wind and hydropower, said Hoppe. The pharmaceutical sector with its good research location is also promising. “There’s going to be a lot going on here.”
At the same time, the AHK boss emphasized that due to stricter immigration rules since Brexit, many skilled workers have been missing. According to Hoppe, he doesn’t expect the British side to deviate from their strict rules: “The current government is more interested in restricting immigration.”
“Decoupling from world trade”
Germany remains Britain’s second most important trading partner, said Hoppe. However, the drop in trade figures showed that the UK as a whole is trading significantly less than it used to. “There was this whole idea of ’Global Britain’. It’s still a mirage at the moment,” said the AHK boss. The UK did not come out of the pandemic that strong in terms of trade. A certain decoupling of the British economy from world trade has already taken place.
The British government did not consider that many European producers also have locations in Great Britain. Since Brexit, you could no longer simply send material and employees back and forth. “It’s no longer worth keeping this British site in the European network because even intermediate steps such as the secondment of employees and customs formalities involve a lot of bureaucracy,” said Hoppe. This also has consequences for integration into world markets. However, Great Britain is too far away for integration into US value chains.