Brexit vote sent confidence ‘off a cliff’ for firms
JUST a quarter of small business owners expect the economy to improve over the next 12 months following the Brexit vote, according to the Smith & Williamson Enterprise Index.
The latest survey from the accountancy and investment management group, which covers the three months to the end of June, shows that the referendum had a profound effect on firms. A quarter of respondents submitted their surveys after the result.
‘Confidence was badly affected by uncertainty in the lead-up to the referendum, but responses submitted after the event indicate that belief in the economy and business prospects fell off a cliff,’ said Guy Rigby, head of entrepreneurial services at the group.
‘Only a third of respondents were optimistic about their own prospects after the referendum, a decline of nearly 20 percentage points since the last quarter.
‘And just 15 per cent of business owners and entrepreneurs expected the economy to improve in the postreferendum landscape.’
The index measures the views and confidence of owner-managers and entrepreneurs in the UK and it fell back to below its 2013 level. Many respondents said they had put hiring on hold and fewer than half expect to increase their headcount in the next quarter, a decline of nearly 20 percentage points from the previous quarter.
Rigby said: ‘The UK has long been a hotbed for international talent so it is vital that steps are taken to ensure that it retains this position.
‘Certainty needs to be given to those migrants who are living, working or intending to provide support to our vital small businesses and scale-ups.’
Respondents were confident the Government would continue to support private enterprise, with a slight rise in the belief that this would be the case after the referendum.
‘Despite the economic negatives and the challenging state of affairs, it does appear that many business owners believe there is the potential to bounce back in a positive way,’ Rigby said, pointing to measures such as the Apprenticeship Levy, and a greater availability of trained staff.