Brexit hasn't had dire consequences for UK and European businesses, but a chill factor for expansion and growth is evident.
A new poll of large companies in the UK and Europe shows most have seen no fallout from Brexit yet, but aren’t waiting for it to materialize. The first Thomson Reuters Quarterly CFO Brexit Survey paints a picture of a business community that is sure change is coming, even if it isn’t quite sure what that change will look like.
Over June and July, Thomson Reuters sought insight from 200 chief financial officers at companies with more than $100 million in revenue across 15 sectors, from aerospace to telecommunications.
The most noteworthy finding: 69 percent of all respondents said Brexit has yet to impact their strategic planning, but they are taking “initial steps” to be prepared all the same. That compares to the 43 percent who said “observing only” is the sole preparation their company has made with regard to Brexit.
Laurence Kiddle, managing director for the EMEA Tax & Accounting business of Thomson Reuters, which conducted the research, called it “a relatively muted response so far.”
“The overwhelming majority of businesses say that Brexit has yet to affect their planning,” he said. “But our data demonstrates that the implications of Brexit are beginning to be seen for different parts of the economy.”
The good news for the UK is that the business community does not appear to be readying for measures as drastic as leaving the British Isles or moving a large number of staff elsewhere.
- Ninety-six percent of respondents said they did not anticipate relocating their headquarters from the UK because of Brexit.
- Eighty-one percent said they do not anticipate relocating staff from the UK.
However, there are also signs that Brexit has chilled growth for many of the responding companies.
- Twenty-one percent of respondents said Brexit had caused them to hold off from expanding within the UK. For comparison’s sake, only 1 percent said they had held back from expanding within the EU.
- While 40 percent said they do not expect Brexit to impact their staffing levels, 34 percent said they expect it to lead to a decrease, and only 15 percent think it will lead to an increase. (Ten percent of respondents selected “I am not sure.”)
- When asked what they thought “the biggest potential benefit for your business” of Brexit was, a full 51 percent selected “I do not think there is any.”
At least one major reason for this concern appears to be the fear that Brexit will result in increased complexity and confusion.
- That no trade deal will materialize between the UK and the EU was a worry cited by 23 percent of respondents.
- Likewise, “increased trading complexity due to no trade deal being reached” was also cited by 23 percent of respondents.
- Behind those two concerns came fears about the depreciation of the British pound, which was cited by 18 percent of respondents.
The poll also found businesses trusted the Chancellor (the UK’s finance minister) and Governor of the Bank of England much more than Prime Minister Theresa May or the Foreign and Brexit Secretaries.
Confidence in British politicians
If 0 is no confidence and 10 is extremely confident, how much confidence do you have in the following individuals to generate a positive deal for your business/industry?
Thomson Reuters Quarterly CFO Brexit Survey will be conducted every three months, so it will quickly create an accurate and comprehensive picture of how the business realm thinks, feels and reacts with regard to Brexit.