Business owners are becoming increasingly wary of the impact of a potential Brexit, research finds.
Some 81 per cent of respondents feel that Britain leaving the EU would negatively impact their business, up 13 per cent from June 2015, according to the latest Smith & Williamson Enterprise Index.
Guy Rigby, head of entrepreneurial services at Smith & Williamson says that when the organisation first sought business owners’ thoughts on Brexit, the Conservative Party had just been elected and a potential Brexit felt quite remote.
‘However, as we approach the referendum date, business leaders are seemingly more apprehensive about the prospect of leaving the EU,’ he says.
The Smith & Williamson Enterprise Index, which measures the views and confidence of owner-managers and entrepreneurs in the UK, decreased four points to 111.4, its lowest point for 12 months.
Brexit worries and concerns over the state of the UK and global economy appear to be the primary cause as expectations for growth fell by 9 per cent.
However, 80 per cent of respondents feel that their own prospects for the next 12 months have increased over the past quarter, up 5 per cent from the last quarter.
‘This improvement potentially highlights an entrepreneurial self-belief in spite of broader market headwinds,’ Rigby says.
Overall, business owners appear quite confident in their own ability to grow, with 74 per cent anticipating growth (or an acquisition) in the next 12 months.
In addition, a record 50 per cent think that access to funding has improved over the past quarter, despite only 38 per cent having an appetite to borrow.
Those who expect their turnover to increase over the coming year declined 12 per cent since the end of the last quarter.
There is a concern over the financial health of trading partners, with only 55 per cent believing their health was improving, a seven point decline over just three months.
Rigby says, ‘This is not supportive of the government’s aspirations to increase UK exports. If this sentiment becomes reality, it could have huge ramifications for future growth.’
Only 48 per cent of respondents believe there are sufficient people and skills to fill vacant positions. In particular, more than 66 per cent of respondents believe the lack of STEM (Science, Technology, Engineering and Maths) skills among students is hindering the scaling-up of British businesses.
A shortage of talent is a continuing problem for British business, Rigby says. ‘Stress on the available talent pool can’t be ignored; businesses must train more people and upskill their existing workforces as capacity remains tight but, equally, employees must come with the basic ingredients.
‘This starts with education and encouraging students to acquire skills, an area where government policy changes and educationalists can have a big impact.’
Further reading on Brexit