Brexit shake up of the consumer electronics industry

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stocksnap_8b0z5gdjt1-1We are close to closing a topsy-turvy year that has mixed up the consumer electronics industry.

Seismic political shifts both at home and abroad have had a huge impact on prices for these goods and there is already some evidence of an impact on the electronics supply chain too.

Rising prices for consumers

Brexit sent shockwaves through lots of industries and markets, but the impacts on currency markets have had the most immediate effects.

We didn’t have to wait long to see price increases on a whole range of popular brands. And one of the most controversial was an overnight increase of up to 20 per cent on Apple’s products.

The drooping value of sterling has already hurt British consumers and other businesses importing from abroad. But it is not yet clear what impact this is having and will have on sellers.

The industry has a lot of experience managing turbulence and uncertainty, particularly turbulence associated with exchange rates and demand forecasts. But industry actors need to be flexible if they are to be resilient.

Impact on the supply chain

With exchange rate shifts making overseas suppliers more expensive, and with the value of the pound forecasted to drop again in 2017, the temptation to reshore parts of the manufacturing supply chain have grown stronger.

Reshoring can help electronics makers improve their cost position. It also enables them to move prototyping and production along more quickly. With one day shipping available from British producers, and more reliable standards in terms of quality, British production has benefits aside from the cost considerations.

The reshoring trend has been a popular idea for several years now, but there is good reason to believe that now the trend will begin to accelerate.

Challenges ahead for exporters

Donald Trump, a reshoring advocate from the other side of the Atlantic could have a negative impact for British exporters. The United States is Britain’s single largest export destination and the nation’s goods and services trade well over there.

With president-elect Trump posturing towards rebuilding America’s economy from the inside and erecting trade barriers against the rest of the world, he threatens to make life more difficult for exporters in this country.

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