SMEs yet to see impact of Brexit vote
Almost three-quarters of small and medium-sized businesses have not seen any impact on their business from the UK’s vote in June to leave the European Union, new research from Close Brothers suggests. The latest Close Brothers Business Barometer, a quarterly survey of the attitudes and priorities of SMEs across the UK, reveals that 73% of firms have seen no effect at all on the performance of their businesses since the Brexit vote.
SMEs remain relatively sanguine about the referendum result; only 24% said they had delayed an investment decision because of Brexit and only 26% had noted any increase in anxiety amongst employees about job security. While 44% of SMEs fear the referendum result may see them lose business in the months and years ahead, 40% are actually anticipating an increase.
Close Brothers research mirrors other assessments of the short-term impact of the Brexit vote since June’s referendum. While confidence among businesses appears to have fallen sharply in the days and weeks following the vote, it subsequently bounced back. The Office for National Statistics said in September that it not yet seen any discernible impact from the Brexit vote on the economy.
If sentiment does take a turn for the worse, the research from Close Brothers provides early indications of where such an impact will be felt. Those businesses that have seen an impact on performance pointed to three factors: 34% said customers were spending less, 30% warned that finance was now harder to come by, and 26% had seen skilled workers leave their firms.
Commenting on SMEs were taking their time to assess the longer term impact of Brexit and considering all their options, David Thomson, CEO of Close Brothers Invoice Finance and Rentals, said:
“It’s clear that despite the pre-referendum warnings, there has not been any calamitous impact on SMEs from the UK’s vote to leave. However, SMEs are not complacent and are acutely conscious of the need to monitor both threats and opportunities that may yet come from Brexit.
“Some SMEs are having to rethink their plans in the wake of the referendum, as their customers rein back their spending and as finance and people become more difficult to find. Over time, it may be that more SMEs are faced with such problems – it is therefore crucial that firms have contingency plans in place they can turn to if performance does begin to deteriorate.”
David also urged SMEs to ensure their businesses were built on a stable financial base, he concludes:
“During periods of economic volatility, businesses need strong finance to ensure they can continue investing for the long-term while managing short-term cash flow issues – it is important to consider a wide range of options now and to put funding plans in place ahead of any challenges emerging.”