Nearly one in three fear their company will close before the end of this year, primarily as the long-term effects of Brexit start to bite, according to alarming data shared with City A.M. this week.
A slightly bigger number, 37 per cent, don’t think their business will survive until the end of 2027, as more than half (54 per cent) of UK business owners indicated they found 2021 to be a more challenging year for their business than 2020.
Brexit was and continues to be a real obstacle, the entrepreneurs said, with 73 per cent of those taking part in a countrywide-survey by One World Express saying their business has seen zero benefit from the UK’s departure from the EU.
A quarter of UK businesses were significantly impacted by Brexit last year and one in three of respondents said their company experienced difficulties when attempting to secure working visas for EU based employees in 2021, while 43 per cent faced supply chain disruption.
Import and export drop
As the overwhelming majority (73 per cent) of business leaders said their organisation has seen no benefits from Brexit, a quarter made a conscious decision to move away from importing or exporting to or from the EU in 2021.
Moreover, the data showed that half of business leaders consider the potential emergence of new Covid variants to be the greatest threat to their businesses in 2022.
“Brexit was always going to present challenges to UK businesses, but these have been compounded by the pandemic,” explained Atul Bhakta, CEO of One World Express, this morning.
“This double threat has resulted in staff shortages and supply chain problems, with Brexit adding new red tape on top of this.”
“With further uncertainty created by the Omicron variant, it is little wonder that so many business leaders are concerned about the survival of their organisation,” Bhakta added.
He pointed out many businesses are looking at non-EU markets now.
“Indeed, trade between UK and non-EU countries have remained strong throughout 2021. After all, customs rules for such countries have remained unchanged despite Brexit, making the pursuit of trade opportunities beyond the EU seem a more attractive prospect,” he concluded.
UK businesses’ focus on exporting to the EU was highlighted by fresh data published this morning, namely that Brexit could reduce the UK’s exports to the EU by -7.73 per cent by 2025.
This is largely because smaller EU countries are benefitting from Britain’s departure from the European Union, according to the report by City broker IG Group, which evaluated export data to determine the impact of Brexit on international trade and to show areas of potential growth.
The top three countries that benefitted from Brexit were Finland, Luxembourg, and Portugal.
Other countries that benefited from the vacuum left by the UK after Brexit included Ireland, Croatia, Greece, Lithuania, and Cyprus. The highest proportional increases occur in locations where trade was smaller to begin with, the firm found.
For example, in Finland, exports of aircraft, spacecraft and parts thereof beat estimates by 11,715.28 per cent, at €102.71m instead of its predicted €0.87m.
Meanwhile, Luxembourg’s actual figures for exports show an increase of 2017.99 per cent above estimates, at €16.38m instead of €0.77m.#
The firm’s City analysts gathered export data from the UK, countries from the EU, and some additional selected countries, to identify trends stemming from the impact of various factors that occurred during 2020.
The team evaluated the UK’s main exports prior to Brexit, such as precious metals, vehicles, and pharmaceutical products, alongside the top exporters of the same products in the EU and Singapore to understand which countries were able to increase exports.