24/10/2019 - News
Current ‘Brexit uncertainty’ is a major challenge for one in four European firms – but almost half are optimistic about long-term success
Despite the current uncertainty around Brexit being a major challenge for European companies, almost half of firms believe the UK’s ultimate departure from the EU will be good for business, according to a new report from global corporate finance house Clearwater International.
The study of more than 2,100 European companies in major Western European economies revealed that Brexit anxiety is present across Europe, with 23.9% of all firms highlighting it as being among the top three challenges their business faces.
Perhaps unsurprisingly, anxiety about Brexit is most commonly found in the UK, with 34% of firms surveyed saying it is one of the biggest challenges they face. But after the UK, Brexit-related concerns are the highest in Republic of Ireland (27% say it is a major challenge), Germany (26.8%) and Spain (26%), three of the UK’s top European trading partners.
While firms in other European countries are less concerned about Brexit uncertainty, it is still significant: 18.4% of French firms, 19% of Portuguese, 16% of Danish, and 12% of Italian firms labelled it a major challenge.
However, while anticipating and preparing for Brexit is a short-term issue, particularly as there still remains doubt over the actual leaving date, 46.5% of European firms in the study are a lot more optimistic about their fortunes post-Brexit, including 51% of British companies.
Michael Reeves, CEO at Clearwater International said: “It seems companies in general are pretty confident about their long-term success. This research suggests they are pragmatic about the UK’s departure and know they have to adapt, as they would to any other business challenge, and look for new or revised trading opportunities.
“But in the short-term, anticipating the impact of Brexit is causing a significant challenge to many businesses. Understandably this is likely to do with uncertainty around the timing and whether it will be a no deal exit.
“This echoes what we have found on the ground from the companies we speak to who are desperate for more clarity around Brexit, its potential impact on the way they do business, and what changes they will need to make to trade in the new environment.”
When asked what impact Brexit would have over the long-term on their business, more than half (51.2%) of UK firms surveyed said it would have either a ‘positive’ or ‘very positive’ impact, compared to 29.2% that thought it would be ‘negative’ or ‘very negative’.
This pattern was mimicked across Europe, with some 62% of Irish SMEs believing Brexit will be positive for their business, compared with just 29.2% that believe it will be negative.
Similarly, 54.4% of French firms and 58.8% of German firms in the study believe Brexit will ultimately be positive for their business, ahead of 42% of Italian SMEs and 38% of both Spanish and Danish SMEs who think the same.
Portuguese firms are by far the most pessimistic about the long-term effects of Brexit, with 37% saying it will have a ‘negative’ or ‘very negative’ effect on them.
Overall, across all countries surveyed, 46.5% of firms said they think Brexit will be positive for them, compared to 23.8% which said it will impact them negatively, while a quarter said they expect it to have no impact on their prospects.