Businesses 'unaffected' since Brexit, revealed UK200Group survey

A report by UK200Group surveyed members and clients, primarily SMEs, to find out if and how they have been affected by the Brexit decision.

Jonathan Franks of Hillier Hopkins LLP, said, “The survey shows that entrepreneurs fear recession and the uncertainty. General economic slow-downs and the uncertainty which drives economic failure, are always bad for business. Concerns about trade tariffs, currency strength and the property market, which supports underlying business borrowing, were all important.”

The recent survey issued by the UK200Group shows that 65.4% of private business owners have noticed no change in new business enquiries or sales since the Brexit vote. The remainder were split: with reference to new business enquiries, 10.3% felt that their situation had improved and 12.6% felt that it had deteriorated. In terms of sales, 11.2% believed that the situation had improved and 11.7% felt that it had deteriorated. Overall, 11.7% of respondents felt that new business enquiries and sales were not relevant.

Franks continued: “The survey noted both opportunities and risks around Brexit, from trade tariffs and damage to the EU itself, to the possibilities of creating new advantages in a more tax favourable environment once the EU is no long restricting government policy. The real change is in confidence, which has suffered significantly, and if there was one message that came out more clearly than others it is the need for clarity, simplicity, and consistency.”

The survey was completed by 238 of the UK200Group’s members and found that the majority have experienced no change in new business enquiries or sales. This would indicate a quarterly growth close to that of Quarter 2 of 2016 (estimated at 0.6%). A number of surveys have seen a dip in business owners’ confidence for the future.

James Abbott, president of the UK200Group, said: “One of the most surprising things is that for the majority of firms, very little has changed and the members act for over 150,000 owner-managed businesses, those businesses will turn to them for advice and reassurance.”

Respondents were divided into three groups: those with concerns about Brexit, those who were confident and those who were unsure.  Some 78% of those asked thought that economic forecasts are no more reliable than weather forecasts.

The Office for National Statistics recently released final economic growth figures for the second quarter of 2016: 1 April to 30 June.  Its provisional figures for the period estimated that gross domestic product (GDP) had grown 0.6% since Quarter 1 of 2016, and 2.2% since Quarter 2 of 2015.

The ONS prepares to release figures on Friday about the health of the economy prior to the referendum vote, the period since Brexit will come under speculation.

When asked about their business fears, respondents said they would be reassured if the government would enter into a set of trade agreements with the EU similar to the old Common Market, agree with the EU that there will be no tariffs imposed on cross-border trade, and that they could be sure that after the political arguments, sterling will revert to its usual levels.

Jonathan Franks added: “It’s surprising that although only 15% of respondents were engaged in imports or exports, concerns about tariffs and exchange rates were the most all-pervading issues raised. This can be because of probable repercussions of an increase in import and export costs. If that client’s trade is affected, the supplier is likely to feel the effect too.”