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Highlights
- Brexit and Covid have together led to a fall in the growth of UK factory output in December, as per HIS Markit and CIPS.
- Labour shortages and supply chain constraints have negatively impacted the UK’s manufacturing sector.
- The soaring prices for freight, shipping and air transportation have created a major hurdle in exporting goods.
With Covid-19 hitting the world at the same time as Brexit, the UK economy has suffered tremendously. The combined catastrophic effect of both these factors has made it very difficult for the UK economy to revive. The new Omicron variant has further worsened the recovery and next few months are looking to be difficult.
According to the latest data from IHS Markit and the Chartered Institute of Procurement and Supply (CIPS), Brexit-related costs and pandemic-related restrictions have together led to a fall in the growth of UK factory output in December 2021. The labour shortages and supply chain constraints have negatively impacted the UK’s manufacturing sector while the export demand has been falling for last four months in a row. The soaring prices for freight, shipping and air transportation have created a major hurdle in exporting goods.
As compared to its European counterparts, the UK is lagging behind in terms of economic recovery and is not expected to recover to pre-pandemic levels until 2023, as per a research conducted by insurance firm Euler Hermes. The impact of Covid and Brexit may fade this year, however their impact on the UK factory output and exports can’t be accurately assessed as of now.
The UK is among the top exporters of pharmaceuticals, gems and precious metals, mineral fuels, machinery, and vehicles etc. Here are some of the major global UK export companies whose stocks are potentially affected due to Covid and Brexit.
RELATED READ: PMI revised upward: Should you buy these manufacturing stocks?
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GlaxoSmithKline plc (LON: GSK)
UK-based healthcare firm GlaxoSmithKline plc supplies pharmaceutical products worldwide. The market cap of the FTSE100-listed company stood at £80,840.57 million and it has given a return of 16.02% to its shareholders in the last one year as of 4 January 2022. GlaxoSmithKline plc’s shares closed at GBX 1,597.40 as of 4 January 2022.
Johnson Matthey PLC (LON: JMAT)
London-headquartered Johnson Matthey PLC produces chemicals and sustainable technologies for various global markets. The market cap of the FTSE250-listed company stood at £3,946.69 million and it has given a negative return of -17.58% to its shareholders in the last one year as of 4 January 2022. Johnson Matthey PLC’s shares closed at GBX 2,068.00 as of 4 January 2022.
Rio Tinto plc (LON: RIO)
Anglo-Australian company, Rio Tinto plc, is among the largest metals and mining companies across the globe. The market cap of the FTSE100-listed company stood at £61,058.77 million and it has given a negative return of -14.16% to its shareholders in the last one year as of 4 January 2022. Rio Tinto plc’s shares closed at GBX 4,938.50 as of 4 January 2022.
RELATED READ: How Brexit has affected UK in last one year
Mondi Plc (LON: MNDI)
UK-based manufacturing firm Mondi Plc supplies packaging and paper products worldwide. The market cap of the FTSE100-listed company stood at £8,866.21 million and it has given a return of 5.85% to its shareholders in the last one year as of 4 January 2022. Mondi Plc’s shares closed at GBX 1,854.00 as of 4 January 2022.
Smith & Nephew plc (LON: SN)
UK-based manufacturing company Smith & Nephew plc supplies medical equipment worldwide. The market cap of the FTSE100-listed company stood at £11,379.38 million and it has given a negative return of -16.88% to its shareholders in the last one year as of 4 January 2022. Smith & Nephew plc’s shares closed at GBX 1,305.00 as of 4 January 2022.
