Business leaders in the UK are the least confident of seven major EU countries about the performance of their respective economies, according to a new snapshot of business opinion carried out by global accountancy and business advisory organisation BDO.
The survey, which forms part of a wider research report to be released in early December, questioned over 200 senior business leaders across seven EU countries including the UK. These findings indicate a bleak picture for the next six months, with two thirds of UK business leaders believing the economic climate in the UK will worsen and only 10% believing it will get better.
In comparison businesses from other nations are more optimistic about their domestic economy.
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Almost a fifth (17%) of businesses surveyed here in the UK expect a decline in the financial performance of their own business, contributing to a general feeling of pessimism.
The UK’s withdrawal from the EU is also having an impact across the channel, with the majority of business leaders in all seven countries expecting the European economy to worsen rather than improve over the next six months.
Despite over a third of European businesses surveyed having aggressive growth plans to increase market share, 42% believe that the UK’s withdrawal from the EU will have a negative impact on their business over the next five years.
According to research from the House of Commons1 as of 2018 46% of UK exports and 54% of imports passed through EU countries, making the bloc the UK’s largest trading partner.
This high exposure to the EU creates future risk for the UK with the survey revealing that half of EU business leaders expect trade with the UK to decline post-Brexit. This is echoed by 40% of business leaders in the UK expecting a reduction in trade with the EU.
According to BDO’s research, those anticipating the highest decrease of their country’s trade with the UK include Spain (81%), Denmark (67%) and Italy (53%). Spain is the EU’s sixth largest exporter of goods to the UK and Italy the eighth.
However the outlook for non-EU markets could be positive, with a quarter of EU businesses and a third of UK businesses expecting Brexit to accelerate their trade with markets outside of the EU.
Analysed by individual country, the US is technically the UK’s largest trading partner, accounting for 15% of total goods and services, a number that has increased year on year.
Stuart Lisle, tax partner at BDO commented on the findings,
“It is an unsettling time for business leaders on both sides of the channel. Our initial findings suggest the overall feeling for the next 6-12 months is one of continuing uncertainty.
“With a quarter of business leaders concerned that their business may not survive another economic crisis, the government must not overlook the importance of supporting and encouraging business in their future policy-making, whatever the outcome of Brexit.
“In order to survive, reduce the impacts of a potential downturn and look towards a positive economic future, the UK government must strive to create a new, more balanced economy supporting regional powerhouses, being less reliant on the financial services sector in London and the South East, and make policy decisions that will help businesses of all sizes and sectors to thrive.”