40% of UK SMEs in the construction industry unprepared for Brexit
New research from Aldermore bank reveals that the main reason for the lack of Brexit preparations by UK small and medium-sized enterprises (SMEs) in the construction sector was because of their continued focus on managing the impact of the Covid-19 pandemic.
Andrew Dixon, commercial director for specialist finance at Aldermore said: “Whilst the delay in preparing for Brexit is understandable given the ongoing impact of the pandemic, it could have serious financial consequences and make 2021 just as painful as 2020. It’s crucial that SMEs begin to take steps to prepare for the potential wide-ranging effects of what is increasingly looking likely to be a no-deal Brexit.
“Businesses who are confused about where to find to information on how to prepare should consult the government’s guidance for SMEs post-Brexit transition. This will help them work out how any regulatory changes could impact them and their business. Aldermore has also created a Brexit hub with key information for businesses to help them best prepare for the transition and the challenges and opportunities that lie ahead.”
Why is a lack of Brexit preparations concerning?
The apparent lack of Brexit preparation among many UK construction SMEs is particularly concerning as on average, 28% of their monthly business income is dependent on business with customers in the EU. Should tariffs or levies be introduced on building materials or services from the EU, this could have a significant knock on effect on cashflow.
Of those UK construction SMEs that have started to prepare for Brexit nearly one in five (19%) have diversified into new markets in preparation for a potential decrease in income and one in ten (10%) have started to offer more tailored services and products to suit individual clients.
Overall, 17% of SME owners think Brexit will worsen the economic difficulties caused by Covid-19 while over a quarter (27%) expect Brexit to have no impact on their business.
A lack of information is hampering SME preparations for Brexit
Other than the impact of Covid-19, the main reasons cited by SMEs for not preparing for Brexit was the lack of information available (40%). Just under a third of SMEs (29%) say they don’t have the funds to get an expert to help with Brexit preparations and nearly a third (31%) say they are confused as to where to look for Brexit information.
