Brexit Fails To Dent UK SME Confidence
On 23rd June 2016, the UK voted to leave the EU (often referred to as Brexit). In the aftermath, UK Prime Minister David Cameron resigned, the value of the British Pound dropped to its lowest point in over 30 years and US $2tr was wiped from global markets. But new figures have shown Unicom that Brexit has failed to dent UK small to medium-sized enterprise (SME) confidence.
The Business Growth Fund (BGF), which provides long-term capital to British companies, recently released its latest Growth Climate Index. The Index, which surveyed 450 respondents, serves as a key indicator of UK business confidence. It found that 90% of business leaders believe that Brexit will facilitate a short-term fall in national economic expansion.
Despite this expectation, 74% of those questioned said that they still believe that the UK is a great place to set up and expand a company. Only 41% of those polled admitted that they postponed vital business decisions throughout the referendum campaign period, despite uncertainty around its result and the economic instability that Brexit would bring.
The Growth Climate Index also asked small businesses about what the UK should prioritise in its upcoming negotiations to leave the EU. Over half (54%) of those polled said that ensuring British companies can still access the single EU market should be the key focus. More than two in ten (22%) said that ensuring foreign companies remain or invest in the UK should be the priority.
Just 10% of those polled said that drawing the best global skills and talent to UK shores should be the priority, while 9% think the main focus of negotiations should be reducing regulatory burdens on businesses. When asked which sector will be most affected by Brexit, 58% of those polled said financial services, with manufacturing and construction following at 16% and 9% respectively.
Commenting, BGF Chief Executive Stephen Walton said: “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. 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.”
“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.”
Robust business environment
CNN Money notes that the UK is the fifth largest economy in the world, with gross domestic product measuring US$3tr as of early 2016. The UK was ranked seventh in the World Bank’s Doing Business 2017 report, unchanged from the year before despite Brexit uncertainty. Within this context, Walton makes a valid point; the UK is a great place to start and grow a business, even in a post-Brexit world.