A no-deal Brexit will put British manufacturers' profitability at a substantial risk, industry bodies have warned as the United Kingdom (UK) and the European Union (EU) are still in complicated Brexit negotiations that have yet to produce a result.

In a no-deal scenario, disruptions to supply chains could reduce the net profits of five key British manufacturing industries alone by as much as 30 percent, or 3 billion British pounds (3.79 billion U.S. dollars), with the automotive and technology industries among the hardest hit, according to a report published on Tuesday by the manufacturers' organization Make UK and law firm Squire Patton Boggs.

"No deal would leave manufacturing facing tariffs on the import of goods and just-in-time delivery logistics would become inoperable. Furthermore, business would be unable to access the people to ensure British companies can fill vacancies where they have skills gaps or send workers to the EU for service contracts and other commercial opportunities," said Stephen Phipson, CEO of Make UK.

According to the report, 64 percent of manufacturers say the Brexit delay and uncertainty has had a directly negative impact on their company's profit margin in the past two years, while almost a half have already experienced a noticeably negative change in EU customer or supplier appetite towards doing business with them.

With only two weeks away from the current Oct. 31 Brexit deadline, the UK and the EU are working against the clock to lock down a Brexit deal ahead of the EU summit starting on Thursday, which is seen as the last chance to agree any deal before that deadline.

Last month, the UK House of Commons passed a law known as the Benn Act, which requires the prime minister to ask the EU for an extension until Jan. 31, 2020, if the two sides fail to agree a deal by Oct. 19. "This new legislation pushed through by opposition parties means a further extension looks more likely than ever," Make UK said.

"Taking no-deal on Oct. 31, 2019 off the table is to the advantage of manufacturers. Postponing the threat to a future date and repeated short extensions, however, are highly damaging to the profitability of British manufacturing," Make UK said.

The Society of Motor Manufacturers and Traders (SMMT) also published a new survey on Tuesday, revealing the effects of a no-deal Brexit on Britain's automotive sector. It said a third of carmakers are cutting jobs and about 80 percent are concerned about damage to their future business prospects.

More than 500 million British pounds have already been wasted on measures that will not deliver returns, rather than being invested in much-needed research and development. Profitability, new business opportunities and investment are all under threat as industry faces a WTO tariff bill on cars and vans alone, a cost that cannot be mitigated, according to the SMMT.

Mike Hawes, SMMT chief executive, urged a deal between the UK and the EU. "A deal that, in the short term, enables a 'business as usual' transition for as long as it takes to negotiate and implement the future trading relationship. In the longer term, that deal must replicate all of the benefits we currently enjoy, which means an ambitious deal that delivers free and frictionless trade."

"UK jobs, innovation, trading strength and economic growth all depend on the automotive sector so we urge all parties to get a good deal done before it is too late," Hawes said.

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