Sentiment among businesses in the south regarding the impact of Brexit dipped in the fourth quarter of 2017 according to the latest survey by leading audit, tax and consulting firm RSM.
The survey, conducted by YouGov, featured RSM’s Brexit Monitor index, in which any reading above 100 indicates that businesses are more optimistic than pessimistic. Sentiment among businesses in the south about the impact of Brexit on their business over a two-year period slipped markedly from a weak positive score of 102 in the third quarter of 2017 into negative territory with a score of 79 in quarter four.
Businesses across the region were similarly downbeat about the impact of Brexit on their business over a five-year period, with the index score plunging from 116 in quarter three to 92 in quarter four.
In contrast, businesses in all other regions were broadly positive about the long-term impact of an EU exit on their business, with the exception of Yorkshire and the north east, the only region with a lower index score (90).
Despite the region’s concerns, businesses across the south appear to be the most prepared for Brexit compared to other parts of the country. Middle market firms in the south said they had taken 39% of actions needed to prepare for the UK exiting the EU, compared to the national average of 36%. Actions taken to date include reviewing the status of EU workers, expanding or looking to expand into non-EU markets, and adopting measures to increase productivity and efficiency.
Elfed Jarvis, RSM’s regional managing partner for the south region said: "Our findings suggest that many businesses throughout the south of England, not to mention the rest of the UK, are frustrated with the political uncertainty surrounding our future trading position with the EU. It’s striking though that businesses across the south are more downbeat about the impact of Brexit than in other regions – both in the short and long term. They are also the least confident about the Government being able to deliver a good deal. However, they are also displaying a degree of pragmatism, getting on with the necessary preparations to mitigate any eventual negative consequences and to take advantage of new opportunities.
‘We will watch eagerly over the course the coming year to see if this sentiment changes as trading negotiations progress.’