The organisation’s review of the Government’s economic analysis found the value of goods and services in the region would fall by 8.1% by 2034, compared with a situation where current arrangements with the EU remained in place.
Commenting on the impact of a no-deal Brexit, one CBI member said: “In the longer-term the company has serious concerns that if the UK becomes a more difficult or expensive place to procure goods from, our rivals in Germany, Italy, Austria and Sweden will all have a competitive advantage over us, regardless of a competitive sterling exchange rate.”
The food and drink industry – the largest manufacturing sector – would be hit the worst, with the value of goods dropping 11%. The loss of access to key non-EU markets through EU trade agreements would mean Scotch whisky – the country’s biggest export – could face import duties of £53m a year to access them.
CBI Scotland director Tracy Black added: “CBI Scotland members are clear: if the new approach to finding a Brexit deal continues to be a game of who blinks first, the whole economy will pay the price.
‘Not ready for no-deal’
“The deadlock will only be broken by a genuine attempt by all politicians to find consensus and compromise, not stick to rusting red lines and political conditions. Scotland is not – and cannot be – ready for no deal.
“The projected impact on our economy would be devastating and, while business will do all it can to reduce some of the worst aspects, a no-deal scenario is unmanageable.”
Meanwhile, food and drink manufacturers need to start implementing their no-deal Brexit contingency plans, legal firm Eversheds has warned, as the threat of a hard exit from the EU draws closer.