While getting to grips with the protocol caused some disruption in 2021 signs are now showing firms have become familiar with their new responsibilities and are even seeking new opportunities. According to survey data by trade body Manufacturing NI there has been a large increase in those who see a return to business as usual, 40 percent versus 23 percent in July. The number of firms reporting disruption persisting has also fallen from 41 percent to 34 percent. According to Manufacturing NI, this is the first time the survey has found those reporting no impact outnumber those reporting disruption.
In a sign of its diminishing impact, other problems are frequently replacing the Protocol as a top concern for business.
Labour shortages have now emerged as by far the biggest problem for manufacturers with four out of five ranking this as their number one or number two problem.
Recruitment has been a widespread problem across the UK, and indeed many other economies, with a large scale movement in jobs dubbed ‘the Great Resignation.’
Research released today by consultancy RSM found two-thirds of businesses were struggling with recruiting staff with a third saying they had delayed expansion plans as a result.
Global pressures also appeared in the survey in the form of Covid with firms reporting a big impact on turnover and profit as well as a rise in company debt.
Inflation emerged as an issue with rising energy, transport and materials costs adding to the burden.
Meanwhile, three out of five rated the Protocol as their least challenging issue.
One in four even reported seeing the Protocol as providing them with potential business opportunities.
Manufacturing NI’s report described Northern Irish businesses as “Protocol Pragmatists” explaining: “manufacturers are natural problem solvers and the survey respondents have provided evidence that they are overcoming issues and those who can are increasingly grasping opportunities presented by NI’s unique status by picking up more business in GB and in the EU.”
The majority of businesses now report they accept the protocol is here to stay and wish to see improvements through mitigation and simplification.
Key points to emerge were a desire for a lighter touch by the UK and EU and better education for British traders and EU member states on their requirements.
Two out of five firms complained their suppliers in Great Britain continued to be unprepared causing strains on supply chains.
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Meanwhile, although the number of firms reporting business as usual with their EU suppliers grew, many also reported EU origin goods sent to Northern Ireland via Britain were not freely circulating as promised.
Chief Executive of Manufacturing NI, Stephen Kelly said the responses overall showed manufacturers were “overcoming issues” but there were “still problems” and “more work required.”
The UK and EU resumed talks over the Northern Ireland Protocol this week with Foreign Secretary Liz Truss acting as lead negotiator for the first time since Lord Frost’s resignation.
Ms Truss has said she hopes for a “reset” in the talks but stated the EU has a “clear responsibility” to fix current issues.