Business leaders across the West Midlands are urging employers to reduce their exposure to risk in the event of a no-deal Brexit.

A report, based on responses to the Business Brexit Health Check, has been designed to produce bespoke information for businesses, highlighting areas of their operations that are exposed to Brexit-related change, tips on preparing and information on support available.

This Saturday (31 August) marks two months until the Brexit deadline of 31 October. Unless an alternative is agreed, such as a further extension to negotiations, a no-deal Brexit is the default outcome.

The ‘Business Brexit Health Check’ is delivered by the West Midlands Combined Authority (WMCA), Greater Birmingham Chambers of Commerce (GBCC), Black Country Chamber of Commerce (BCCC) and Coventry & Warwickshire Chamber of Commerce (C&WCC).

Analysis of responses to the Health Check between 28 May and 31 July 2019 revealed that businesses selected an average of eight areas where they could be impacted by Brexit. However, only 52 per cent reported discussing the potential implications of Brexit at board and senior management level and only 38 per cent report having undertaken a thorough Brexit risk assessment on their operations.

Key findings include:

• Manufacturers scored higher on the Brexit readiness Index, indicating that they believe they have undertaken slightly more in-depth preparations than services sector firms. • However, manufacturers scored between a 3.4 and 2.5 out of a possible 5 on the Brexit Readiness Index indicating that they do not feel “significantly” prepared for Brexit. • Manufacturing sector firms were exposed to Brexit-related change in more than twice as many areas as services sector firms. • Over a quarter of manufacturing sector firms export services to the EU and a quarter of services sector firms buy goods from the EU. • Over a third of all firms report exporting goods or services to one or more of the c.50 nations that the EU has existing trade agreements with. • Across each of the most frequently reported areas, manufacturers are significantly more likely to have taken steps to prepare for Brexit than services sector firms. • Over four fifths of manufacturers report buying goods from EU nations and over three quarters report selling goods to EU nations. While a high proportion of manufacturers say they have undertaken a thorough Brexit risk assessment or reviewed their major suppliers and/or customers, a lower proportion report having adapted import and/or export strategies. • While almost a third of services and over half of manufacturing sector firms report employing EU nationals, just over one in ten services and over a third of manufacturing firms say they have undertaken proactive communication and engagement with key groups – including employees.

Paul Faulkner, CEO, Greater Birmingham Chambers of Commerce said: “It’s clear from these results that there are a lot of firms that could be impacted by a no-deal Brexit who aren’t yet taking practical steps to prepare.

“While we will continue to lobby against a chaotic Brexit, it makes good business sense for all employers to ‘take a look under the hood’ of their business, identify any potential risks arising from a no deal Brexit and take steps to reduce their exposure to those risks.

“Many businesses are put off starting to prepare by thinking it’s going to be overly time-consuming and complicated. That’s why we created the Business Brexit Health Check, to make it as quick and easy as possible for businesses to get the information they need on how they might be affected and what they can do about it.”

Andy Street, the Mayor of the West Midlands and the former CEO of John Lewis, said “The West Midlands is the exporting and advanced manufacturing heartland of the UK and our economy is growing as fast as any other region.

“That means we rely heavily on importing materials and exporting products and that makes us more vulnerable to a no deal or disorderly Brexit than other parts of the country.

“With that in mind it is vital that, with the clock ticking towards October 31, businesses across the region are prepared in the event of a no deal.

“To help with this preparation, I would urge companies to take advantage of the practical help and support offered by the Business Brexit Health Check if they haven’t done so already.”

Corin Crane, CEO, Black Country Chamber of Commerce: “We know from conversations with our members that Brexit preparedness varies across sectors and businesses in the Black Country. What we can see from the latest data is that manufacturers have taken slightly more in-depth preparations than those in the service sector but are still not ‘significantly’ well prepared.

“This is clearly due to manufacturing respondents being twice as exposed to Brexit-related change. We know that the West Midlands has an EU-born manufacturing workforce of just under 15% and that our top 10 export destinations are filled with EU countries, so there is an urgent call for clarity for manufacturers in the West Midlands.

“Working with our partner Chambers in the West Midlands, we will continue to promote our Brexit Health Check and ensure that businesses across the region understand how we can support them.”

Louise Bennett, chief executive of Coventry and Warwickshire Chamber of Commerce, said: “Whilst it is encouraging that manufacturers are more advanced in their Brexit preparations, we know that there is still a long way to go, particularly given the exposure of such firms to Brexit-related changes.

“The latest results emphasise more than ever the importance of planning for Brexit, particularly for Coventry and Warwickshire and the wider West Midlands with our proud manufacturing heritage.

“The volume of trade with the EU and countries with which we have trade agreements through our EU membership shows how important it is that government heed our call to avoid a messy and disorderly Brexit.”