Over thousands of businesses across Britain are currently treading water as they wait for the Brexit fog to clear. They have stockpiled mountains of goods to offset delays at the ports and, if they are manufacturers, rented warehouses, to store parts and raw materials. There are also some, like Bathstore, who admitted they couldn't hang on any longer. The bathroom retailer filed for administration last month after a rocky year when consumers cut back on big-ticket purchases, with new cars and newly installed bathrooms among major purchases being shunned.
While a rival retailer might rescue a part of the store, but the current trend, which has seen most businesses think first of survival while some are undone and sink below the waves, is likely to continue until the politicians arrive on some kind of deal with the EU. The construction industry was said to have "dropped like a stone" while manufacturers suffered a similar reversal, with a majority saying order books were shrinking and current activity was down on the previous month.
However, contrary to their sense of doom, from many commentators in the construction industry, IHS Markit researchers said, "Demand for construction staff was relatively resilient in June, with the latest survey pointing to only a marginal fall in workforce numbers. Where a decline in employment was reported, this was often linked to the non-replacement of voluntary leavers."
The same approach of wait-and-watch can be detected across most industries. Setting aside the 6,000 redundancies at Jaguar Land Rover, and the planned closures of Honda's car factory in Swindon and Ford's factory in south Wales, most manufacturers have hunkered down to see out the worst of Brexit.
The UK's largest trading partner in the EU, Germany saw its manufacturing "drop off a cliff" in May. Industrial orders fell 2.2 per cent month-on-month when analysts were only expecting a marginal 0.2 per cent drop. Once bulk order were stripped out the May data was even worse, declining by 3 per cent from the previous month. Analysts at HSBC said, "This clearly suggests that the deterioration was genuine and not due to fluctuations in volatile bulk orders."