Last Brexit Before Toll: What Departing EU Means for UK Printing Community
Last week’s news that Britons voted to exit the European Union — a.k.a. Brexit — caused quite a ripple in the global financial markets and left a lot of folks outside of the United Kingdom scratching their heads as to what may be the ramifications. Fear not, dear hearts, as our amigos across the pond aren’t quite sure what to make of it, either.
For those unfamiliar with Brexit, here’s the “…For Lazy Folks” description that may or may not compel you to research further: Great Britain voted to withdraw from the 28-nation European Union. Conservatives drove the effort, which many felt would enable the country to have more authority on issues such as jobs, immigration and trading.
While it may be a case of “be careful what you wish for,” the crystal ball is a bit murky regarding the U.K.’s financial future. Even more nebulous are the prospects for British printers, who had their own challenges to deal with prior to the historic vote. But that country is embroiled in chaos, and the vote (which was a non-binding referendum, mind you — prompted Prime Minister David Cameron to announce that he will resign in October.
In order to get a better perspective, we dialed long distance to chat up Gareth Ward, editor of the U.K.’s Print Business magazine and perhaps his country’s best-known industry journalist.
“It’s kind of the same pressures and feelings that are driving support for Donald Trump,” Ward says. “It’s a feeling of powerlessness in the face of globalization and global pressures. That’s being felt in the perceived rise in immigration.”
According to Ward, there’s a sense that certain parts of the country — the northeast fringe, east of England, southwest of England, southern Wales — that were once considered the industrialized heartland, a powerhouse industry, have suffered. Steel and mining are two examples, and these masculine industries have moved overseas to China and elsewhere.
“They’ve become kind of deprived, rundown areas. There’s a feeling that we don’t have jobs because the newcomers have taken them,” Ward adds.
Least we think immigration is an issue unique to the United States … the U.K. also battles with reality and perception. The transient population has traditionally performed seasonal agricultural work, but Ward points out the jobs now tend to be done by the transient population from Europe — Poland, Latvia and Central Europe. Much of it is the type of labor that the indigenous population does not want to tackle.
“They look down their noses at these jobs as menial,” Ward says.
Other subtopics to the main conversation — the downward pressure on schools and a lack of government funding; the unkempt state of roads, construction and other infrastructure; and the declining health service — may be more steeped in perception than reality, but have nonetheless become talking/rally points to the overall EU breakaway.
Ward has provided a list of ramifications, both short term and long, that printers in the U.K. may soon be facing as a result of this historic vote. They are:
- The value of the British Pound has taking a beating. Most paper, printing plates and ink are imported products, and several paper companies jacked up prices once the final Brexit tally was calculated. A considerable rise in consumables is expected during the next 90 days.
- Should immigrant workers be forced to return home to their country of origin, that will have a distinct impact on the “casual labor” and bindery workers. A heavy faction of Polish workers fills these roles currently, and relying on native people could cost British printers more money.
- Britain’s largest printer, Polestar Print Holdings (PPHL), has fallen into administration and is looking for buyers. The anticipated loss includes a great deal of capacity, with three web offset and three gravure presses already taken out of action. This will open more importing of print, with retail inserts being increasingly produced in Germany and The Netherlands.
- The cost of borrowing money will increase and, with the threat of recession looming, printers are more likely to take a conservative approach to capital investments.
- Another fear stemming from Britain’s economic climate is the threat of reduced marketing spend.
- On the other hand, the U.K. — typically a net exporter in the past (about 10% is shipped out) — could see more exporting opportunities due to the declining value of the Pound.
As the exiting of the European Union could take as much as two years, and with the country’s leadership in a state of flux, it will take time for the smoke to clear and provide a more detailed picture as to the future of Great Britain, politically, economically and socially.
And as the U.S. presidential race kicks off in earnest next month in what will no doubt be a nasty, vitriolic campaign, it is a reminder that change will always pay a toll.