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JURY’S OUT ON IMPACT OF BREXIT FOR UK SMES M
ore than half of SMEs (56 per cent) say they have felt no impact on levels of business from the UK’s
T
he country may have
made the decision to leave the EU back in June, but the debate of when, how and what the long-term effects might be continues to dominate the headlines. Despite the initial panic in the City caused by the result, things have calmed down and the markets and economy have stabilised to a certain extent, but an air of uncertainty still exists. The same can be said of the
manufacturing industry with experts and analysts theorising on what will happen next and whether it will be better or worse for business. Looking at some of the reports published so far, it would seem the industry has faired quite well up to now with more than half of SMEs surveyed by Close Brothers (see story opposite) saying they haven’t been affected by the result so far. And according to Midlands-based specialist engineering recruitment firm, Jonathan Lee, investment in automation technology and new equipment remains strong in the area. This is of course all very
encouraging and hopefully a sign that the Brexit vote wasn’t all bad for Britain, and some good may come of it. Only time will tell.
Neil Mead - Managing Editor
decision to leave the EU, according to the Close Brothers Business Barometer, a quarterly survey of UK SME owners and senior management across a range of sectors and regions. Nationally, 24 per cent of those surveyed said Brexit
had had a direct effect on their company, while a further 20 per cent felt that it was too early to tell. Regionally, businesses in Greater London felt the
most affected by Brexit, with 46 per cent answering ‘yes’ to the question ‘have you seen an impact on your business caused by Britain’s decision to leave the EU?’; 38 per cent answered ‘no’. Least affected was the North East (no – 71 per cent;
yes – 20 per cent) and East Anglia (no – 69 per cent; yes – 12 per cent). Wales was similarly bullish, with 63 per cent answering ‘no’ and 12 per cent saying ‘yes’. Of those companies who felt that there had been an
impact on their business, 40 per cent have seen an improvement in business while 43 per cent have seen a decrease. The remainder (17 per cent) said business had stayed about the same. Engineering firms were the most positive, with 65 per cent of firms surveyed saying the impact of Brexit has been beneficial. “It’s clear that the majority of UK SMEs are yet to
feel any real and tangible effect from Brexit,” said Neil Davies, CEO, Close Brothers Asset Finance. “It’s interesting to note that of those who have been impacted, it’s pretty much split down the middle in terms of those who have been positively and detrimentally affected. “There is also a real regional difference, with
businesses in London feeling the most exposed.” More than three quarters (76 per cent) of businesses
have not delayed spending or investment decisions because of the EU Referendum.
Regions most likely to answer ‘no’ to the question
‘have you delayed any spending or investment decisions because of the EU referendum?’, were East Anglia (87 per cent), Wales (90 per cent) and Northern Ireland (90 per cent). Greater London was the region most likely to delay
spending, with 48 per cent of respondents suggesting that Brexit had prevented them from investing. “It’s interesting to note that 88 per cent of smaller
firms – those with a turnover of between £250k to £500k – were the least liable to allow the EU referendum stop them from pushing their business forward,” continued Davies. “Close Brothers has a history of lending through all economic cycles, and experience tells us that these organisations aren’t sitting on large reserves of cash. In order to maintain business levels, they typically don’t have a choice but to spend and invest to ensure a sustainable flow of cash. “Firms don’t become unviable overnight; we see it as
our responsibility to do what we can to ensure our customers, who are in the main SMEs, remain in business and can build towards a profitable future.” Companies that said they had delayed spending
cited the economic uncertainty created by Brexit as the primary reason (62 per cent) for holding back. Only 18 per cent of business owners are of the view
that the decision to leave the EU will lead to fewer opportunities. Tellingly, however, 49 per cent feel they anticipate no change and that it is likely to be ‘business as usual’. The remaining 33 per cent are looking forward to better prospects in the future. “Greater London companies are the most positive
region we surveyed,” said Davies. “53 per cent expect more opportunities while 48 per cent of engineering firms are equally as positive.” For more news from Close Brothers Asset Finance see
www.closeassetfinance.co.uk/industry-insights
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POST-BREXIT MARKET STILL BUOYANT FOR AUTOMATION IN THE MIDLANDS ACCORDING TO RECRUITMENT SPECIALIST
I
nvestment in automation technologies is as important as ever to Midlands manufacturers post-Brexit, according to specialist in
engineering and manufacturing roles, Jonathan Lee Recruitment. Richard Heaton, automation recruitment specialist at Jonathan Lee
Recruitment, explained: “We did see a little bit of dip immediately after the result of the vote was announced, with both European candidates and companies uncertain what the outcome would mean for them. However, since then confidence seems to have returned. In fact, investment in the area of automation, seen as a key factor in helping businesses to compete on a global stage, is very buoyant at the moment. “Another factor driving demand in the sector is the number of high
tech start-up companies that are emerging. In fact we have seen a 35 per cent increase in demand for skilled people from software and electronics engineers through to project managers and systems designers from start- up businesses. We anticipate that the recent acquisition of Britain’s largest technology company, ARM Holdings by Softbank in Japan, will encourage more entrepreneurs to invest in high tech industries to capitalise on the strong technical skills base we have in the UK. “Online retail is also driving demand for warehouse automation as
4 SEPTEMBER 2016 | AUTOMATION
companies compete to meet the expectations of customers for same day or next day delivery. Advances in warehouse automation for managing inventory and picking stock is now critical to fulfilling customer demand for retailers to be able to respond in real-time, without compromising on quality and customer service. “With the Midlands acting as a key hub for retail sales logistics, it is
perhaps not surprising that major players are already well-ahead. We are now encouraged to also see SME retail businesses looking at automation to both drive growth and meet demand. With the right team in place to fast-track the changes, investment in robotics and automation can help regional SMEs to compete and grow and it may surprise them to see how quickly they can achieve a return on investment.” Jonathan Lee’s Automation Recruitment division works in partnership
with some of the leading manufacturers of bespoke machinery and automated integrators to support both technical and commercial needs in engineering, manufacturing, technical, supply chain and commercial roles, specialising in mechanical design engineers, PLC programmers, controls engineers, robot programmers, mechanical fitters and panel wiremen on contract or permanent basis. Visit
www.jonlee.co.uk for more details.
/AUTOMATION
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