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Planning for Brexit outcomes already underway for many of the UK’s SMEs

Brexit Outcomes barometer

With continuing uncertainty about the outcome of Brexit, many of the UK’s SMEs have expressed concern about the impact this could have on the supply chain and have started planning for the various possible outcomes, research from Close Brothers Asset Finance reveals.  

  • 47% of SMEs have started planning to counter potential supply chain disruption 
  • 40% export to Europe  
  • 29% will ‘suffer’ from a reorganising of the supply chain post-Brexit   

This is particularly true of the larger end of the SME scale, with the results showing that the larger the turnover, the more likely it is that plans are already either in place or are being formulated. 

“This forward thinking is typical of the enterprise shown by the UK’s SMEs,” said Neil Davies, CEO, Close Brothers Asset Finance. “It clearly demonstrates that in the absence of certainty, businesses have taken it upon themselves to assess the impact leaving the EU will have on the supply on chain, which for many businesses exposed to Europe, is critical. 

“In the key sectors that have strong relationships in – and with - Europe, including Engineering, Manufacturing and Transport, planning is advanced and above the national average of 47% who admitted they’d started their planning.” 

Who actually exports to Europe? 

Of the 900 business owners surveyed, 40% said they export goods to the EU, with the North East the highest of the regions, at 59%. 

“Looking at the sectors, at 57% of Manufacturing firms export to the Europe and are consequently the most exposed to disruption to the supply chain,” said Neil. “Understandably, it’s these same firms who have also started the planning process early. 

“Every sector we polled had some level of export dealings with Europe, which demonstrates clearly just how entwined we are with the continent and how important it’s going to be to ensure the movement of goods isn’t disrupted, both in the short and long term.”

Reorganising the supply chain – the winners & the losers

The prevailing view is that any reorganising of the supply chain will not be in anyone’s best interest, yet one in five of those surveyed are of the view that it’s not necessarily a negative. 

Taking a sector view again, 31% of Manufacturers feel that there will be some benefit to a reorganising of the supply chain against 32% who say they will ‘suffer’. 

“Looking at the figures, with 51% selecting the ‘neither’ option, it’s clear that the continued uncertainty means businesses have little idea of the impact a reorganisation will have – it’s not something they have ever had to deal with on this scale,” said Neil. 

 

All figures, unless otherwise stated, are from a GMI survey conducted in August 2018. The survey canvassed the opinion of nearly 1,000 SME owners across the UK and RoI and across several industries on a range of issues affecting their businesses.