Malcolm Scott, Swift Electrical’s commercial director, is anxious for a Brexit deal to put an end to the ongoing uncertainty
I agree with the real concerns that London and South-East-based ‘top-end’ kitchen studio retailers are expressing, as expounded by Johnny Grey
I also agree with Derek Miller’s analysis that the trend towards ever better specifications within the new-build sector, which has given many businesses some much-needed growth in recent years, may be reversed during 2019. Kitchen studio businesses in particular have seen some very tough times, but I feel that they are well able to survive any Brexit storm.
Clearly, as property prices have spiralled upward in London, driven by an influx of new residents, many from Europe, a macroeconomic climate has developed that leaves the area much more vulnerable to Brexit changes than most other parts of the country.
While this distortion of property prices in London has had a knock-on effect throughout the country, the overheating of the property market is much less of an issue outside London. There is still a considerable shortage of housing in many parts of the country, which will not be changed by Brexit. While I am not for a moment arguing that all parts of the country will not be affected by Brexit, clearly, the most economically active areas, with the highest housing prices and a larger percentage of ‘international’ jobs, will suffer the most. Unlike a typical economic recession, where the less active economic areas suffer the most, those living in Scotland, Wales, the Midlands and the northern powerhouse area might weather this ‘self-induced recession’ somewhat better than those in London and the South-East.
Make no mistake, when London sneezes, we all catch a cold, but this time London may catch a cold while other areas simply sneeze.
I write this before MPs vote on Theresa May’s deal but, whatever the outcome, 2019 is unlikely to be an easy year for anyone unless MPs pull their finger out and vote to accept it before the end of March. If we leave with the deal that is on the table now, most of the problems associated with Brexit will be removed and we can all get on with selling kitchens without the worry of a major recession.
As most manufacturers have built up stock in anticipation of ‘the worst’, acceptance of May’s deal might well lead to a considerable amount of extra promotional activity, which might just help sell all that stock piled up in warehouses throughout the UK.
While acceptance of the deal might upset a group of very noisy MPs, most businesses and most consumers would regard any deal as a very clear indication of the eventual outcome of the Brexit journey, which would greatly reduce uncertainty.
My guess is that most people on both sides of the argument, like me, just want to see any deal in place that allows us all to get on with our lives.