Which Manufacturing Industries and Sectors are Most Vulnerable to Brexit?

36 Pages Posted: 30 Jan 2019

See all articles by Michael Gasiorek

Michael Gasiorek

University of Sussex

Ilona Serwicka

University of Sussex

Alasdair Smith

University of Sussex

Date Written: January 2019

Abstract

When the UK leaves the EU, trade arrangements between the UK and EU will change. Most of the options for future UK‐EU relationships currently under discussion imply increased trade barriers, which will reduce trade and also have effects on output and prices. In this paper, we use a multi‐market partial equilibrium model to analyse the vulnerability of 122 manufacturing industries to Brexit. In all five Brexit scenarios we model, there is an overall reduction in UK manufacturing output. Output grows in some industries but at the expense of higher consumer and intermediate goods prices. High tech and medium–high tech sectors are more at risk of a decline in domestic production than lower tech sectors. In most areas of the country, demand for high‐skilled workers falls more than for medium and low‐skilled workers.

Keywords: Brexit, European Union, international trade, manufacturing, partial equilibrium model

Suggested Citation

Gasiorek, Michael and Serwicka, Ilona and Smith, Alasdair, Which Manufacturing Industries and Sectors are Most Vulnerable to Brexit? (January 2019). The World Economy, Vol. 42, Issue 1, pp. 21-56, 2019, Available at SSRN: https://ssrn.com/abstract=3325391 or http://dx.doi.org/10.1111/twec.12757

Michael Gasiorek (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Ilona Serwicka

University of Sussex

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Alasdair Smith

University of Sussex

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
7
Abstract Views
305
PlumX Metrics