How have small businesses fared since Brexit?
Created: February 2017
Since the outcome of the referendum vote became known last June, many businesses have lived in a state of limbo.
With the government about to trigger Article 50 of the Lisbon Treaty, much is hanging on the type of Brexit deal the UK government can negotiate. However, as various surveys have shown, SMEs have retained a largely positive and confident outlook. Many decision-makers are predicting that their business will increase over the next two years, both in terms of income and headcount.
Business confidence holding up
Ahead of the referendum, experts and commentators alike had predicted a major fall in business confidence across the board, and pointed to a period of recession as a highly-probable outcome of a vote to leave the EU. True, the pound took a nose-dive following the announcement of the result, however that has led to increased export sales in many sectors of the economy. However, the impact of higher import prices has yet to work its way through the economy, and looks set to fuel higher inflation.
The International Monetary Fund (IMF) remains optimistic and has raised its forecast for the UK’s economic growth for this year, following what it sees as a better than expected economic performance since the Brexit vote. It now expects the UK economy to grow by 1.5 per cent this year, compared with the 1.1 per cent it was previously forecasting. However, their forecast for 2018 has been downgraded from 1.7 per cent last October to 1.4 per cent, reflecting the challenges that lie ahead.
In a survey for Opus Energy conducted in July 2016, 29 per cent of SME respondents said they felt more confident about their business than they had before the vote. 43 per cent of business owners didn’t feel confidence in their business had changed.
Surveys conducted since the beginning of the year have shown that confidence has been dented slightly, as the path to Brexit is revealed as being far from straightforward. The general view is that once the government’s negotiating stance is clearer, then business owners can plan for the future with greater certainty.
‘Business as usual’
In many quarters, little has materially changed since the vote. Many firms are looking forward with confidence to a trading future that is less likely to be beset with the stifling effects of EU red tape. However, for those businesses who depend more heavily on trade with the EU, or rely on foreign labour, the picture is bound to be less optimistic until the outcome of trade negotiations becomes clear.
But on this point, the Institute of Export and International Trade is quick to reference our great exporting history, reminding us that the UK has played a major role over the years in influencing trading organisations such as the G20 and the WTO. Our knowledge and experience in building global markets looks set to help us make a success of our new trading status.
Fortunately, the UK brand remains strong and resilient. UK entrepreneurs are resourceful and determined, they look set to tackle new markets outside the EU with determination and renewed enthusiasm.
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