General worries about Brexit have “significantly diminished” among UK’s SMEs, new research finds.
In fact, the number of small businesses that were broadly positive about the UK’s exit from the European Union had risen to 41% in Q4 2017, up from 33% the year before, according to a report published by international payments provider WorldFirst today.
Despite recording some slowdown in 2017 – for example, the year saw the number of SMEs trading internationally halve from nearly three million in 2016 – WorldFirst’s Global Trade Barometer found “some signs” that small businesses may look to return to international trading in the longer term.
The company, together with market research firm YouGov, surveyed 1,020 senior decision makers in small and medium-sized British businesses.
It found that while fewer SMEs are trading internationally, average amounts remain consistent, and those SMEs that still take the plunge are trading with more markets than ever.
The research recorded a rise in the number of UK businesses exporting across all regions, with the biggest increase to the US. It also saw SMEs increasingly picking up imports from emerging economies, including in Asia, Africa and the Middle East.
According to the report, the services sector has particularly felt the impact of falling consumer spending and an uncertain business environment in the light of Brexit, which has caused some SMEs to draw back from international trade.
On the other hand, it points to manufacturing as a UK sector that continues to push the economy forward. This sector, the report states, has overtaken transport and distribution as the “most internationally-minded sector”. Almost half (49%) of all businesses in manufacturing make a foreign transaction in the average month.
Commenting on the new survey results, WorldFirst’s chief economist Jeremy Cook says that a positive outcome of 2017 is the fact that “UK SMEs are seemingly drowning out the Brexit noise”.
“Since the end of 2016, a significantly larger contingent of small businesses feel positive about leaving the EU,” he says. “The pound is stronger than it’s been since the referendum and many SMEs may finally have plans in place for a post-Brexit world. We can only hope this translates into businesses dusting themselves off and getting back to international trading in 2018.”
The optimistic sentiment around Brexit was echoed by British SMEs who spoke to GTR for an article in its UK-focused supplement, which comes out next week.
Freddie Tucker, trade and structured finance director at Dints International, for one, said that he was hopeful Brexit would drive the UK’s focus on exporting in overseas markets.
“The UK is becoming a technological centre. We are already a financial centre. There is great political will behind us growing our exports, so with those three things, you would think that Brexit could actually be the catalyst to putting them all together and creating something really quite meaningful for British exports,” he said.
Stephen Mellor, key accounts lead at HiETA Technologies, added that while the fluctuation of the pound is creating some uncertainty, Brexit concerns are not shaping the company’s everyday activities.
“When you look at our day-to-day, those concerns are not really shaping the attitudes or the approach massively, because what do you do with uncertainty? We are still going to go out selling to everyone that is likely to want to buy what we have got,” he said.
However, Cook at WorldFirst notes that, despite a growing optimism, another half of UK SMEs are still worried about the potentially devastating impact Brexit could have on their business.
“Like the rest of the nation, SMEs are divided on whether Brexit will be a catastrophe or an opportunity for trade and growth. The onus is on the government to reassure these businesses, removing uncertainty about their future so they can position themselves for growth.”