Today, we have published the first survey of the experience of NI business to the operation of the NI Protocol. Report here https://www.manufacturingmonthni.com/wp-content/uploads/2021/02/Protocol-Report-February-2021-Final.pdf

The survey took place in the most turbulent period at the end of the first month, with significant media attention and in a difficult political environment during the week which included the suspension of some controls at the Ports. /2

As predicted, the manufacturing community has experienced significant disruption. The absence of detail and time, uncertainty on our status and that of our goods, and political instability all contributing to a month of turbulence. /3

January was difficult but it is clear from the survey that most manufacturers want the Protocol to work. Many believe they are getting on top of issues and looking towards opportunities. /4

However many predict that difficulties will persist and are appealing for the support from our Executive, the UK Government, the EU and its member states to make the protocol work. /5

It was largely irrelevant if firms made plans or not. 30% of all businesses with or without plans experienced no negative impact; 44% of firms had some negative impact which is easing; 1 in 4 firms report significant impact, some believe this is likely to persist. /6

Half of all respondents experienced no issues or quickly got on top of them. A further 28% believe they are making progress and the challenges will ease. That means almost 4 out of 5 believe they are now in a good, stable position. /7

However 23% believe the challenges are likely to persist. These firms are likely those struggling most with internal capability and experience with customs formalities and those struggling to help or re-orientate their supply chain. /8

GB suppliers who were unaware, unprepared or are unwilling is the biggest challenge. Whilst 1 in 4 businesses have not experienced any issues, three quarters are experiencing difficulties with their GB suppliers. More than half, 53%, report their suppliers were unprepared. /9

There has been significant concern that a large part of the GB supply chain would simply cut NI out. Thankfully this appears to not be as large as feared but at 15% it is still a significant number unwilling to engage with the new requirements /10

Alongside supporting GB businesses to get ready, it is critically important that the UK and EU agree simplifications to make sending goods to NI straightforward. If they do not, the only choice for our firms will be to find new suppliers at home or overseas. /11

Whilst the Protocol brings new controls from GB to NI, our goods are to enjoy free circulation in the EU’s single market and EU goods are to flow freely to Northern Ireland too. /12

Unlike the picture with GB suppliers, some 70% of local businesses either do not have, or have not experienced any issues with their EU supply chain. However, almost 1 in 3 report that these supply chains are disrupted. /13

The UK’s position as a European centre of distribution is under stress. /14

It's a big issue for local manufacturers who find that whilst EU origin content may enter the UK tariff free under the TCA, moving these on to NI could result in not being able to benefit from the tariff free deal as they may be viewed as “at risk”. /15

This is a perverse outcome, is a barrier and many manufacturers, even those with significant experience in Rules of Origin, are struggling to comprehend. /16

1 in 4 have reported that their struggles with GB suppliers has meant they have already had to reorientate their supply chains to local or EU sources. /17

The largest proportion have been working to ensure that their GB suppliers are capable of continuing supply. In many ways, our manufacturers and logistics partners have acted as unpaid consultants for GB companies struggling to get to grips with the new customs requirements. /18

3 out of 4 have maintained or even improved their sales to GB. However, 25% have reported a marginal or significant negative impact. It is unclear if these impacts relate to supply side issues or if there is uncertainty as to the status of NI goods in the UK’s internal market /19

Either way, it is important that the NI Executive and its agencies and the UK Government engage with GB customers to support the work of our manufacturers in providing clarity and confidence. /20

On EU sales, only 23% of firms report a negative impact largely caused by confusion and confidence issues as EU customers struggle to differentiate between UK and NI’s goods having the right to continue to freely circulate in the EU’s single market. /21

On confidence for the year ahead, around 1 in 3 had no concerns and again around 1 in 3 felt there was opportunities now and through the rest of the 2021. However, 2 out of 5 believed that disruption was likely to persist. /22

So, what would they like our Executive, UKG and EU to do? /23

Manufacturers want the Protocol to work. /24

To make it work, they are asking the UK and EU to be active in delivering the necessary mitigations, derogations and compensation. /25

Equally they need the UK and the EU to inform customers and suppliers of the status of NI goods and support their businesses to be capable to continue to trade with NI firms. /26

Almost 1 in 5 suggest that the NI Protocol should be replaced (slightly up from 16% last Autumn) /27

1 in 3 are asking the NI Executive and its agencies to identify and secure new opportunities provided by the Protocol. /28

So, what would they like the UK Government to do?

* Educate and support GB suppliers to NI firms
* Work with industry to simplify processes on the Irish Sea
* Compensate for the additional costs burden

/29

And the EU?

* Inform and educate EU customers and suppliers to trade with NI
* Provide maximum flexibility to remove or simplify Irish Sea controls
* Work with the UK to provide certainty on issues such as TRQs on steel

/30

And finally, the NI Executive?

* Provide the necessary political stability
* Identify and secure new opportunities
* Support NI firms in minimising disruption

/31

In summary, stability, certainty, simplicity and affordability

/ends