The UK business community is hesitant to commit to a future in the UK post-Brexit, according to an independent study commissioned by business credit information specialist Dun & Bradstreet.
D&B reports that overwhelmed by concerns about the future of their business once Article 50 is invoked, 19% of businesses have halted or slowed growth or expansion plans in the UK. Fifty-nine per cent of senior financial decision makers believe that Brexit will be financially damaging to their business.
Sixty-four per cent of organisations surveyed feel that the result of last June’s European Union (EU) referendum has negatively impacted their business’ growth potential. As a result, 72% of respondents are planning for change post-Brexit to manage expected market and business fluctuations, with 49% admitting their business is likely to either leave or reduce investment in the UK post-Brexit while 42% said such a move was unlikely and 9% were unsure.
“It is clear that businesses are analysing and in some cases reconsidering their position in the UK,” said Markus Kuger, senior economist at D&B. “Until we know exactly how Brexit will happen – for example, whether the UK will maintain access to the EU’s common market once it leaves the EU – businesses are going to be cautious.
“No one knows what the business world, and the economy it drives, will look like post-Brexit. We recommend that businesses make contingency plans and remain vigilant of market activity but also, remain calm.”
Six months on…
Assessing how the EU referendum result has impacted their business already, the survey highlighted main consequences, such as: their organisation has become more cautious about investments and expenses in general (24%), while 19% of businesses have seen a dip in deals with European partners and/or customers. Overall, 60% of businesses admit that since June 23, their business has become more risk averse.
Asked what most concerns them about the future of their business in a post-Brexit world, respondents cited access to information and business growth opportunity; 41% of businesses are worried they will no longer have access to as much information about European partners and customers, while 27% are concerned they will miss out on business growth opportunity because they are not part of the EU. Sixteen per cent of businesses are worried they will not have the bandwidth to manage the amount of work needed to ensure regulatory compliance post-Brexit.
“It’s clear that uncertainty from the EU referendum is clouding organisations’ planning and confidence,” said Kuger. “They are worried about their own growth opportunities and, more specifically, they are concerned about essentially being ‘cut out’ of the European business community.
“The only way to truly alleviate their fears is for the government and the EU to make clear what will happen once Article 50 is invoked. The future may not be as dramatic as businesses seem to be anticipating. But until that picture is clearer, we cannot blame them for worrying and starting to think about their future away from the EU.”
Research for the study was undertaken by independent research firm Censuswide. Responses were gathered from 200 CFOs or Financial Directors from media and large enterprises across the UK, from an online survey conducted in October.
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