A poll of 450 board-level directors and chairs following the EU referendum vote reveals that while the outlook for British businesses may be stormy at present, 90 per cent of business leaders believe it is only temporary. More than half, though, are banking on the UK securing access to the single market
54 per cent of surveyed British business leaders and entrepreneurs believe that the UK needs to have access to the European single market as a priority.
The single market has long been recognised has key to Europe’s place in the global economy. With the UK out of the EU, access to talent across the continent may be limited, impacting growth and created a greater shortage of skills in crucial sectors like digital and service industries.
According to Ajay Sule, practice director EIA at Frost & Sullivan, “not being a part of the digital single market could result in further isolation and deprive the UK of the benefits of cross border online trade and e-commerce.” Considering UK’s digital skills shortage, this could hamper opportunities for growth in the short to medium term.
Beyond the digital space, the impact of Brexit on smaller businesses will fall hardest on those that export and import. “Although a trading deal with the EU is likely, there is a lot of ignorance about the benefits the single market brings small businesses,” Simon Cowie, chairman of international shipping firm Mail Boxes Etc said.
According to Cowie, importing and exporting goods to the 27 members of the EU in the past was “almost as straightforward as sending goods from London to Newcastle,” which will no longer be the case post-Brexit. “In future, companies will have to generate Commercial Invoice documentation (in triplicate), face customs inspection and associated delays and, in many cases, pay additional duties and freight forwarding bills,” he added.
The most recent survey of the UK’s business outlook comes from BGF (Business Growth Fund), which surveyed 450 business owners and managers across its network to guage the projected impact the Brexit vote may have on the economy.
According to the research in its latest edition of the tri-annual Growth Climate Index, 90 per cent of business leaders acknowledge the short term economic downside to the Brexit vote, but believe this to improve in the longer-term.
Respondents were also concerned about the impact of Brexit on business investment, with 76 per cent believing that it will prompt a fall in investment.
“Business leaders and entrepreneurs are clearly concerned about some of the implications of Brexit, but like me they remain positive about Britain as a place to do business,” Stephen Welton, chief executive of BGF said.
“The fundamentals that make the UK so attractive to growing businesses have not disappeared, and businesses will continue to contribute to the economy and create jobs. BGF is committed to continuing to invest in the UK’s most ambitious small and mid-sized businesses,” he added, referring to the fact that three in four business owners still strongly believe that the UK is a great place to start and grow a business. Based on this confidence, only 41 per cent of the respondents postponed key business decisions over the campaign period.
According to BGF’s Welton, the business community cannot afford to wait for politicians to provide answers. “It is vital that business continues to make its voice heard to ensure that its priorities are high on the next Government’s agenda. Most importantly, we should aim to ensure that Britain remains a pro-enterprise country and that businesses retain the best possible access to the single market,” he added.
Echoing this, a majority of those surveyed felt that continued access to the single market should be the priority during discussions with Europe. This was followed by attracting overseas businesses to remain or invest in the UK and ensuring that businesses can attract and hire the best international skills and talent.
In terms of the sectoral impact of Brexit, 58 per cent of the respondents believe that the financial services sector will be most affected by Britain’s decision to leave the European Union. This was followed by manufacturing and construction.
