Middle market businesses in the UK are positive about the medium to long term effects of Brexit, according to a new YouGov survey, the Brexit Monitor, commissioned by leading audit, tax and consulting firm RSM.
The survey of more than 300 UK mid-market companies with a turnover between £30-£300m across a range of key sectors, also found that over two-thirds of businesses (68 per cent) were prepared for an EU-exit.
Despite this overarching sentiment that companies themselves feel prepared for an EU-exit, sentiment regarding the economy as a whole was more finely poised with 46 per cent of businesses saying they expect Brexit to have a positive effect on the UK economy, compared to 43 per cent saying it will have a negative effect.
A stark north/south divide also stood out. While businesses in London (55 per cent), the South (46 per cent) and Central England (48 per cent) were more likely than not to be positive about the impact of Brexit on the UK’s economy over the next five years, the opposite was true in the North and Scotland. Businesses in the North West of England were the most negative (55 per cent), followed by North East & Yorkshire (50 per cent) and Scotland (49 per cent).
Simon Hart, RSM’s Brexit lead partner said:
‘Middle-market companies are key to the UK economy, contributing over a third of private-sector GDP, revenues and employment.
‘Despite entering into one of the most uncertain and volatile operating environments since the global economic collapse, middle market businesses appear to be resilient and optimistic about the future.
‘Decision makers appear generally confident that the UK and their businesses will adapt and emerge stronger post Brexit. Whether this optimism will continue during the negotiations remains to be seen, but early sentiment is positive.’
Manufacturing was the most consistently upbeat sector, with 57 per cent of companies operating in the sector positive about the economy’s prospects over the next five years (only 27 per cent were negative), while 78 per cent felt prepared for an EU exit. The financial services (46 per cent) and TMT (55 per cent) sectors were also positive about the UK’s economic prospects over the next five years, whilst only 36 and 39 per cent respectively were negative.
Nine in ten companies (91 per cent) reported they had already taken measures to prepare for Brexit. The most common actions have been to increase productivity and efficiency (36 per cent), review the status of existing EU workers (30 per cent) and increase local recruitment programmes (29 per cent). One in five (20 per cent) said say they plan to move some operations outside of the UK while 18 per cent said they had established, or would look to establish EU-based subsidiaries or branches.