Brexit business barometer
Posted by Andrew Moore, Director, DAV Management.
The results of the latest bi-annual Thames Valley Business Barometer are now in and they show a record drop in confidence levels during the latter half of 2016. Just 48% of business leaders surveyed reported that general levels of economic confidence had either improved or remained the same in the last six months, versus 70% earlier in the year.
DAV Management has been a panel member and actively involved in the Thames Valley Business Barometer ever since it started five years ago. As such, we regularly attend its biannual roundtable to not only discuss the overall findings around economic confidence and business performance across the region, but also to share our perspective on the results and the key challenges we think businesses in the region face. Over 150 local business leaders took part in the survey this time around, which was carried out by PR and marketing agency, C8 Consulting and global accountancy and business advisory firm, BDO LLP.
The survey also revealed that, while headcount and staff attrition remain relatively strong, the significant reduction in confidence, already witnessed in the spring report, is now impacting business performance with a registered drop in turnover, profit and pipeline. The sharp fall recorded in this survey puts confidence amongst the region’s business leaders at a similar level to what it was in early 2012. It is therefore clear that the UK’s decision to leave the EU has had a direct impact on the findings.
The latest Business Barometer survey actually looked in depth at the impact of the EU referendum results among businesses in the Thames Valley and of the 150 businesses surveyed, only 2% said that nothing concerned them going forward as a result of Brexit. The need for clarity about the rules of trading with EU countries (58%) and the investment by government in local infrastructure (52%) came out as the two top concerns.
Nevertheless, the Thames Valley is one of the most resilient parts of the country and, despite the concerns, a number of key opportunities were identified as having arisen as a result of Brexit: the fall in the value of the pound leading to a boost for exporters, tourism and for inward investment (especially from non EU countries), the ability for the UK to agree its own trade deals with countries outside the EU and finally, the ability to set its own rules and make the UK more attractive for business.
Whilst the outcome of the EU referendum has undeniably resulted in the short term view of ‘business as usual’ across the Thames Valley, it is equally clear that bigger decisions are being delayed due to uncertainty and this can already be observed in the figures. It will therefore be interesting to see whether confidence rebounds in the next survey, once the uncertainty of Brexit has started to abate. Despite this, feedback from the Barometer panel we attended also indicated an emerging need for greater agility in business to manage the short term and respond to circumstances faster. This is not only being fueled by Britain’s decision to leave the EU, but also the ever-changing face of the workplace and the constant demand for flexible working.
The Local Enterprise Partnerships of Oxfordshire and Berkshire used the survey to find out what businesses in the region think about the decision to leave the EU. The results of the survey have been analysed by the LEPs and are being fed back to various, key government departments as well as being shared amongst local MPs.
You can download the full report here and read the contributions made during the panel discussion by DAV Director, Charlie Mayes.