Vast majority of Yorkshire and North East businesses brush off Brexit vote
Almost two-thirds of businesses in Yorkshire, the Humber and the North East (63%) say they have yet to feel any financial impact – positive or negative – from the 23rd of June vote to leave the EU, according to new research by the insolvency and restructuring trade body, R3.
While the figure across the UK is higher with 74% of businesses yet to feel an impact, the percentage of businesses in the region which say the vote has already had a negative financial impact on them is in line with the national picture of 16% (equivalent to 28,000 regional businesses). This compares to just 11% of Yorkshire, the Humber and North East businesses (18,000) which say the outcome of the referendum has had a positive financial impact, considerably above the UK wide figure of 5%.
The figures are from a survey of key decision-makers at a representative sample of 500 UK businesses by market research firm BDRC and R3.
Andrew Davenport from Sheffield-based Maxim, says: “The immediate shock of the referendum result was much briefer than expected, and many businesses – and importantly, consumers – have adopted a ‘business as usual’ approach since then.
“The UK is, of course, still a member of the EU, so the impact of the vote itself will be limited for the time being. When we find out what Brexit actually means, things might begin to change.
“In the short-term at least, there are likely to be one or two instances of ‘Brexit’ being used as a bit of a convenient excuse by companies when they run into trouble.”
Mr Davenport adds: “That said, Brexit will be causing genuine problems for a significant minority of companies, and it will be benefitting others. The main reason for this is the sharp fall in the value of the pound, Importers will have been hurt, while exporters may have seen an increase in demand for their products. Uncertainty over the future of the UK-EU relationship is also likely to put some important deals on hold, at least temporarily.
“Anecdotally, while our members say they are yet to see any increase in Brexit-related appointments, many have reported an increase in calls from worried business owners looking for advice as to the impact on their business. There have, however, been a number of cases reported of immediate distress for import businesses which have operated without an appropriate exchange rate hedging policy where the recent adverse rate movements have negatively impacted margin and cash flow.
“While a number of recent surveys have reported business confidence falling since the vote that doesn’t appear to have yet translated into a financial impact for most businesses.”
Larger businesses most likely to have been hurt by referendum result
Across the UK, the businesses most likely to say they have seen a negative financial impact from the referendum result are large companies employing 251 or more people.
Twenty-three per cent of large companies (2,000) say they have seen a negative financial impact from the referendum result, while just 2% say they have experienced a positive impact.
Mr Davenport says: “Larger businesses have much more of a direct exposure to Europe or are much more likely to import materials than the UK’s smaller businesses. They will bear the immediate brunt of any Brexit effect, whether positive or negative.”