Quantuma teamed up with Insider to find out how well prepared companies in the South East consider themselves for Brexit; how they view the wider economic prospect of the UK; and their plans for business growth or transition in the near-term. The results were somewhat unsurprising in that the overriding theme that came out of the survey was uncertainty. However, there are reasons for optimism.
Conducted throughout the months of September and October, our survey found that some 25% of businesses consider themselves under-prepared for and concerned as to the implications of Brexit, whilst 22% of businesses who consider themselves prepared for Brexit still remain apprehensive about its impact. Confidence around future business planning has taken a knock.
Furthermore, business owners are cautious about the wider economic prospects of the UK with a significant 64% of respondents expecting a negative economic outlook in the next 12 months. It is hard not to link this uncertainty to the ongoing machinations around Brexit and the recent General Election. Figures released in August showed that Britain’s GDP shrank in Q2 and according to The Economist, a growing body of research carried out indicates that Brexit-related uncertainty is doing subtle yet serious damage to the medium-term economic prospects. Perhaps against expectations, Q3 saw the UK economy grow by 0.3% and thus avoiding a recession. This was largely due to strong performance in the UK’s services sector.
Asked where they see their business in three years’ time, the majority of respondents said that they weren’t considering significant changes to their business, such as a disposal, fundraising for growth or making an acquisition. Instead, they see their businesses growing organically (50%) and under the same ownership (42%).
Typically though, business owners are pressing on regardless and focusing on core strengths, good practice and where appropriate, consolidation of operations. This ‘business as usual’ approach is underscored by recent data from the Office for National Statistics which shows that investment has increased 2% since the Brexit vote and is only a fraction lower than a year ago. Focus remains on longer-term growth.
Businesses are clearly cautious about the direction of the economy and how Brexit might impact that and therefore, there is a reluctance to undertake big strategic decisions in the immediate future. However, a focus on discipline and expenditure to continue largely ‘as normal’ means we might expect a good number of businesses to emerge from any downturn in relatively strong shape.
Following the recent general election, some certainty might be restored in our political system and in the Brexit process. Business loves certainty and it’s feasible that 2020 represents an opportunity for stability and growth.
With some stability and calmer waters, we are already seeing owners looking ahead at actions they need to undertake to exploit a more certain economic environment, and are unlikely to risk waiting for any further period of uncertainty before executing their strategic plan. We are certainly keeping a watching brief.
