Against the backdrop of ongoing Brexit negotiations in Parliament and the EU, leading South East law firm Thomson Snell & Passmore has continued to survey 140 businesses across the UK’s key sectors in its Brexit Barometer, tracking business confidence and concerns. Since the start of 2019, the Prime Minister’s deal has been rejected by Parliament three times and the UK’s original departure date from the EU of 29th March has elapsed, with a further extension agreed up until 31 October. The consensus is that businesses are waiting for clear guidance on what is going to happen next.
Despite the uncertainty, Thomson Snell & Passmore’s latest results, which captured monthly responses between December 2018 to March 2019, have revealed that the majority of respondents (92%, 91%, 90% and 92% respectively – see figure 1) would not vote differently if there was another referendum. The turbulence over the last four months has not appeared to have significantly impacted the latest responses in the Brexit Barometer – they have remained relatively static month-on-month.
Thomson Snell & Passmore has been canvassing businesses’ sentiment on the development of Brexit since the Referendum vote in June 2016. A second survey was completed in 2017 to compare the survey responses. The latest stage takes the form of the firm’s Brexit Barometer which has run from October 2018 until April 2019. The questions posed to the 140 cross-sector businesses who are participating in the survey were created to capture month-on-month changes in business sentiment in relation to the impact of Brexit against the backdrop of fast-moving political developments.
A new survey question posed to the business respondents in the last four months was: ‘Have you started preparations for a no deal Brexit?’ Unsurprisingly, there has been a month-on-month increase, since December 2018, in the number of respondents who answered ‘yes’ to the question: 37%, 41%, 44% and 49% respectively (see figure 2). This suggests that businesses are increasingly taking steps to review their commercial contracts and supply chains in preparation, but similarly the results also show that around 40% of respondents, month-on-month, have not initiated preparations for such an eventuality, leaving businesses exposed to the potential consequences of no deal.
Other key statistics from the latest editions of the Brexit Barometer survey, included:
- 58% of respondents answered that they are not confident at all about the economy in the next 12 months. This was a significant increase from the response in November 2018, where only 42% of respondents shared this sentiment
- Three months ahead of UK’s supposed official exit from the EU, 38% responded that they had started preparations for such a no deal scenario
- There was a 10% increase in the number of respondents who answered that the Withdrawal agreement had made them rethink their preparations for Brexit, rising from 17 % to 27% in December 2018.
- There was a rise in confidence that businesses would be able to access their supply chain after the UK’s exit from the EU – the January results saw nearly half of the respondents (49%) reply that they were ‘quite confident’. An increase from previous months of up to 10%
- In answer to the question: ‘Have you started preparations for a no deal Brexit?’, 41% of respondents said ‘yes’ and 41% replied ‘no’
- In terms of key concerns for UK businesses, prices and exports continues to top the list for respondents at 29%, whilst there has been a notable drop in concerns around access to the single market. 23% of respondents in December 2018 selected access to the single market as the most concerning factor, same as in November 2018, but the figure dropped down to 17% in January 2019 when respondents were asked the same question again.
- In response to the question, ‘How confident do you feel about the economy in the next 12 months?’ There was more or less an even split with roughly 50% of respondents voting quite confident and extremely confident, and the other 50% replying not at all confident and unsure
- Respondents answered that the most concerning area of business in light of Brexit was prices and exports at 37%. This was followed closely by access to the single market for 27% of the respondents taking part in the survey
- In February, over three quarters (89%) of business respondents, asserted that they would not vote differently now if there was another Brexit referendum.
- Over half of the respondents (at 54%) answered that they are either quite or extremely confident about the economy in the next year, despite the ongoing uncertainty as to whether the UK will exit the EU with or without a deal
- 59% of respondents said that the Withdrawal Agreement has not made them rethink their preparations for Brexit
- With speculation around another Brexit referendum, respondents remained adamant at 92% that they would not vote differently now if there was another referendum.
Furthermore, in April 2019, Thomson Snell & Passmore hosted a panel event aimed at examining the Brexit impact on the agriculture and rural sector; 80 representatives from the sector were surveyed for their views on Brexit. The firm had initially surveyed this sector in October 2017. Confidence in the economy had not changed amongst the agricultural industry in the last two years, with 45% of those surveyed indicating that they were quite confident in the strength of the UK’s economy in the next 12 months. Those surveyed were also confident that Brexit would offer the UK a greater ability to produce free trade deals with other countries (65% and 53% in April 2019 and October 2017 respectively). However, in 2017, 34% of attendees saw export opportunities as a main benefit of Brexit. Whereas this year only 6% still held this view. The question was also posed to the audience as to who would vote for a second referendum. 53% voted for a second referendum to 47% against, indicative of the delicate balance any way forward for Brexit requires.
Commenting on the latest statistics from the Brexit Barometer, Joanne Gallagher, Partner and Head of the Corporate team at Thomson Snell & Passmore, observes:
“As we continue to take the pulse on how the impact of Brexit is being perceived by UK businesses, we have seen that despite watching the tense political negotiations play out in a very public way, respondents’ answers in the Brexit Barometer survey have across the board been quite consistent when compared month-on-month.
With the uncertainty around when we will officially depart from the EU, UK businesses will be increasingly looking for clear guidance from its government. Our Brexit Barometer shows that business leaders are optimistic about accessing their supply chains after we exit the EU and that they would not vote differently if there were another Brexit Referendum. Nevertheless, it is advisable that business owners and operators start looking at their current supply chain, access to goods/services as well as access to talent. Businesses should be putting plans in place now to ensure they are as prepared as possible, regardless of the outcome.”