There are 7 stages of grief, and whilst some eternally optimistic folk seem to possess the ability to progress through all seven in the space of a few weeks, days, or in the case of some politicians, minutes, many of Britain’s business owners frustrated by Brexit took out their anger on their quarterly surveys, it appears.
At the end of July Smith and Williamson released their most recent survey of business owners and revealed that, still raw from Brexit, entrepreneur’s confidence in the economy had hit an all-time low.
Reasons to be fearful?
Only 25% of small business owners felt the economy stood any chance of improving over the next 12 months – a 30% decrease from the previous quarter, when Brexit was felt to be an insignificant sideshow rather than a potential reality – albeit prospects for growth were generally regarded as weak even then.
According to the survey, one in two SME business owners are now pessimistic about their fortunes for the 12 months ahead; another near 30% drop from the previous quarter.
Guy Rigby, Head of Entrepreneurial Services at Smith & Williamson, the accountancy, tax and investment management group, described the latest reading of the Smith and Williamson Enterprise index thus;
“Confidence was badly affected by uncertainty in the lead up to the referendum vote but responses submitted after the event indicate that belief in the economy and business prospects fell off a cliff”.
Oh dear – and there’s worse;
“Only one third of respondents were optimistic about their own prospects after the referendum; a decline of nearly 20 points since the last quarter. Furthermore, only 15% of business owners and entrepreneurs expected the economy to improve in the post-referendum landscape, a further decrease of 13%.”
Although Rigby suggests the results may be reflective of an “overreaction” to the supposedly bleak prospect of Brexit, with one quarter of respondents submitting their responses post referendum, the drop in the index, from 111.4 to 97.7, puts it below its starting level of 100, which was set back in 2013.
14% fewer respondents said they were planning for growth or for an acquisition, than in the previous quarter although 60% still believe such an event is possible over the next 12 months.
Other respondents said they have instigated a hiring freeze, and less than half believe they will increase headcount, a decline of 20% from last quarter.
Rigby believes “The UK has long been a hotbed for international talent”, and that “it is vital that steps are taken to ensure that this continues.”
Certainty that “migrants who are living, working or intending to provide support to our vital SMEs and Scale-ups”, will be able to continue to reside in the UK, is, Rigby suggests, “due to extreme political instability, a few months, or even further, away.”
Reasons to be cheerful?
There are however, some grounds for confidence, or “pockets of optimism”, as S&W refers to them.
Belief in government support for private entreprise remained steady at 56%, with many post referendum responses indicating renewed belief, whilst opinions on the adequacy of the available talent pool reached record highs, with more than half (51%) of respondents expressing the belief that there are enough sufficiently educated or trained staff available – just not for much longer, perhaps.
Rigby attributes this belief to government measures such as the Apprenticeship Levy which is set to be introduced this year.
A slight pre-referendum uptick in expectations around export volumes, with 61% believing turnover might increase last quarter, has been slapped back down, with 14% fewer now anticipating growth.
The Enterprise index survey was completed by 191 respondents, 52 of whom contributed their views in the aftermath of Brexit.
But with just one quarter of “shocked” respondents submitting their reports after Brexit, it does rather beg the question – is Brexit also hiding a multitude of other sins?
The saga, and Britain’s domestic and international trade prospects with it, will doubtless rumble on and on. And on.