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German Manufacturers See 43 Percent Probability of Hard Brexit

Summary:
German manufacturers see a 43 percent probability of a hard Brexit on average, according to an ifo Institute's survey of around 1,300 manufacturers conducted in December 2018. A great deal of uncertainty nevertheless continues to cloud the issue. This is reflected in a wide dispersion of responses, ranging from 0 to 100 percent probability of a hard Brexit. There was very little difference in assessments across individual sectors of German manufacturing. Company size did not influence assessments either. The British House of Commons is due to vote on the Brexit agreement next week. 40 percent of the manufacturers surveyed stated that their sales would not be affected by a hard Brexit at all. It would impact 60 percent of companies, but on a

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German manufacturers see a 43 percent probability of a hard Brexit on average, according to an ifo Institute's survey of around 1,300 manufacturers conducted in December 2018.

A great deal of uncertainty nevertheless continues to cloud the issue. This is reflected in a wide dispersion of responses, ranging from 0 to 100 percent probability of a hard Brexit. There was very little difference in assessments across individual sectors of German manufacturing. Company size did not influence assessments either. The British House of Commons is due to vote on the Brexit agreement next week.

40 percent of the manufacturers surveyed stated that their sales would not be affected by a hard Brexit at all. It would impact 60 percent of companies, but on a manageable scale, with a mere 6 percent of turnover affected. 70 percent of those manufacturers that expect to be affected by hard Brexit stated that sales would dip, while 28 percent expect no impact on sales, and 2 percent even foresee positive effects.

Clemens Fuest
Clemens Fuest took over from Hans Werner Sinn as chairman of the IFO Institute in April 2016. He is professor at the Faculty of Economics of the University of Munich.

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