Agreeing access to the European Union (EU) single market and negotiating trade deals with non-EU countries should be the UK government’s main priorities as it negotiates the UK’s exit post-Brexit, reports PwC.
The post-referendum online survey of UK small to medium enterprises (SMEs), conducted for PwC’s My Financepartner (MFp) canvassed a representative sample of 566 SMEs from across Britain with an estimated combined turnover of over £5.7bn (US$7.5bn).
General opinion was that trade deals and market access are more important than immigration targets, or environmental legislation and emission targets. Two in three firms say Westminster should focus on agreeing continued access to the single market, while 62% also want trade deals to provide access to non-EU markets.
Germany would be the top priority EU market for 67% of SMEs with the next preferred export markets – France and Ireland – favoured by only 5% and 3% respectively.
While SMEs see market access and trade as government priorities, only 21% of respondents want the UK government to prioritise environmental legislation and emission targets, while 40% believe that setting immigration targets should be a government priority.
However, despite opting for trade over environment and immigration, only 38% of companies say they have a clear plan to drive their growth in the aftermath of the EU referendum outcome, with 46% saying the government should focus on support for UK exporters looking to expand outside the EU.
On the topic of growth, 32% of respondents intend to grow their workforce over the next 12 months, with medium-sized businesses (45%) more confident than smaller businesses (29%). Across the board however, 21% plan to put recruitment on hold.
While opinions are mixed over strategy and recruitment, a similar picture emerges on productivity. Forty-one per cent expect Brexit to increase their cost-base, while only 25% expect their prices to increase. Twenty-four per cent say they have the right level of management information (MI) to help them fully measure and predict the impact on their business.
The MFp survey found that maintaining access to the single market was particularly important for companies in manufacturing (68%), retail (62%) IT (74%) and media (69%). Generally, the bigger the company as measured by turnover, the greater the importance of retaining single market access. Companies in London and the South East were particularly anxious to retain EU single market access post-Brexit (74% and 72% respectively), as were 73% of Scottish SMEs. In the pro-Brexit heartlands of the Midlands, however, only 53% saw this as a priority.
Asked about the adequacy of current MI systems and their ability to measure and predict the impact of Brexit on their business, 52% said their MI systems either lack sufficient detail or does not help them assess the impact.
Larger SMEs struggle most, the survey found, with 65% of businesses with between £1m – £9.9m annual turnover and 69% of those with annual revenues of £10m or more claimed that they don’t have the MI they need to predict and measure the impact of Brexit on their business.
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