By Raysonho @ Open Grid Scheduler / Grid Engine [CC0] via Wikimedia Commons
Companies across the globe are beginning the new year more optimistic compared to how they have been in decades. However, a new survey reveals that the prospect of Brexit is casting a considerable shadow over sentiment in the United Kingdom.
The comprehensive report that was published by Grant Thornton, an accounting firm, reveals that 58 percent of companies around the world feel optimistic as they head into the new year, which is recorded as the highest level in the 25-year history of the survey.
Possibly boosted by this upbeat mood, 36 percent of companies say that they feel confident enough to raise the prices of their products and services over the course of the next 12 months. It is the highest rate in almost three years – and 50 percent of the companies expect to record higher profits in 2018 compared to what they did during the previous year.
The global picture sharply contrasts with the state of sentiment in the United Kingdom, where Grant Thornton discovered that optimism among firms was at only at 12 percent in the last three months of 2017. The figure is a three percentage point growth compared to the previous quarter. However, it still marks a 14 percentage point decline from the same period in 2016 and a staggering 61 percentage point drop from the same period in 2015.
The head of operations for Grant Thornton in the United Kingdom, Robert Hannah, stated: “UK businesses have effectively been kept in a holding pattern since the vote to leave the European Union in June 2016, with very few details over Brexit negotiations causing significant uncertainty since.”
He also said, however, that “the past few weeks have given businesses a degree of clarity over the process,” which could possibly translate into a pick-up in optimism for the coming months.
“The ‘breakthrough’ deal agreed in Brussels, along with earlier details on the Government’s industrial strategy and corporate governance reforms, have all given businesses a lot to consider over the holiday period,” said Hannah.
Also, somewhat encouragingly, the study discovered that firms in the United Kingdom are displaying a growing appetite for increasing their company’s exports, with 24 percent expecting to do so this year as compared to only 15 percent this time in 2017.
Hannah stated that to help in further addressing and allaying the concerns of UK businesses, the Government should now concentrate on agreeing a Brexit transition period. He explained that the said period would provide certainty in the short term and remove the probability of a “cliff-edge” Brexit in March 2019.
He stated that if a no-deal Brexit is reached by the end of the first quarter of this year, “we could expect to see more firms implementing their ‘no deal’ contingency plans.”