Europe’s aerospace industry is an exemplar for regional economic development. It has a proud record of annual growth in output, a high spend on research, strong export orientation, and flexible manufacturing and services practices. Its reliance on extended crossborder supply chains also means that it is wonderful for European integration and collaboration.
So is Brexit going to spoil the party and blight the current European working relationships? A recent sector bulletin on aerospace produced by the UK Engineering Employers' Federation and Spanish bank Santander examines where Brexit could have an impact.
There may already be an issue with increased costs of imported raw materials for UK aerospace manufacturers, a result of the weakening in sterling. Uncertainty is a major consideration, and could influence future investment decisions on the location of production facilities, particularly for the next generation of aircraft.
The UK is primarily about parts manufacturing and there are only a few original equipment manufacturers with assembly plants in the UK that are able to source locally. The UK trades materials and parts with Germany, France, Spain and Italy – countries that may now seek to enhance their own parts manufacturing capabilities to replace current UK supply.
There is uncertainty about free access for skilled workers to and from the UK. Controls on freedom of movement would be a hindrance on operational efficiencies, collaboration and innovation. The European Aviation Safety Agency (EASA) is an important certifying authority for the industry, and there is now a question mark over the UK’s future membership of EASA.
Aerospace is an important industry for the UK, worth £31bn ($39.9bn) a year in output, most of which is exported, and it has 2398 companies spread across the UK, employing 107,000 people. This is a valuable economic asset and has done well in addressing supply chain opportunities across Europe. It would be a shame to lose these connections. Hopefully, the politicians are aware of what is at stake, and will be able to address uncertainty around Brexit as soon as possible.
Douglas Clark is director of Location Connections, consultants for economic development innovation.