CBI warns Brexit uncertainty hitting investment
Eight out of ten firms say Brexit has had a negative effect on investment decisions, up from 36% a year ago, according to updated research from the CBI which shows that companies are implementing plans to reduce the potential impact
22 Oct 2018
A survey of 236 firms, representing 101 large companies and 135 SMEs, also found the majority will implement damaging contingency plans in the absence of greater certainty on Brexit by December. These include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas.
Over half (58%) have formulated contingency plans, with 41% carrying out some elements already, but only 2% of businesses surveyed have carried out all of their contingency plans.
Half (56%) of those with contingency plans intend to adjust their supply chains outside the UK, and 20% of those have already carried this out. In addition, 44% intend to stockpile goods, with 15% already doing so.
Almost a third (30%) of businesses with contingency plans intend to relocate production and services overseas, with 9% having done so, and 15% intend to move jobs, while 3% have already carried this out.
As regards contingency planning timelines, for 19% of businesses, the latest date to halt further implementation of contingency plans has already passed. For 15%, the latest date to halt further implementation of contingency plans is October 2018.
A quarter (24%) state the latest date to halt further implementation of contingency plans is November 2018 and a further 24% will not be able to stop plans after the end of the year.
For 24% of businesses surveyed, the latest date to halt further implementation of contingency plans is December 2018.
Carolyn Fairbairn, CBI director-general, said: ‘The situation is now urgent. The speed of negotiations is being outpaced by the reality firms are facing on the ground.
‘Unless a withdrawal agreement is locked down by December, firms will press the button on their contingency plans. Jobs will be lost and supply chains moved.’
The survey also asked respondents about Brexit opportunities. Getting on for a third (30%) said they have investigated the opportunities for business growth that may arise out of Brexit but have not found any.
One in five (20%) of businesses have found some opportunities and of these, 33% identified disruption to existing markets as providing an opportunity in relation to Brexit.
A similar proportion (21%) said they wanted to look for opportunities but were unable to because they did not know what form Brexit would take, while 28% have not looked for opportunities, but more than half of those intend to do so.
Report by Pat Sweet