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Brexit uncertainty hits recruitment and investment plans

Published 10/10/2016

Exchange rates were cited as a concern compared to three months ago
Exchange rates were cited as a concern compared to three months ago

Uncertainty following the vote to leave the EU has hit recruitment and investment plans for businesses, an authoritative study has revealed.

A survey of 7,000 firms showed that the UK economy is growing, but at a lower level than before the referendum.

The British Chambers of Commerce (BCC) said its poll painted a mixed picture, with improvements among manufacturers but a slowdown in growth in services.

The survey, covering the quarter after the referendum, showed that fewer firms in manufacturing and services are confident that their turnover and profits will improve in the next year.

Exchange rates were cited as a concern compared to three months ago.

Dr Adam Marshall, acting director general of the British Chambers of Commerce, said: "While many manufacturers have seen something of a bounce this summer, the UK's services sector has slowed significantly, and our data suggests that slower growth is likely in the months ahead.

"Although it is important not to take one quarter's figures in isolation, our survey does show that growth has slowed further since the EU referendum.

"Boosting business must be a key task for Government in the months ahead, particularly as forward confidence on turnover and profitability has flagged for firms across the UK.

"The Prime Minister has given businesses some clarity on the timetable for Article 50, and on short-term regulatory and legal issues.

"This is helpful, but needs to be followed up by a firm demonstration that the Government has a clear and coherent strategy to defend the UK's economic and business interests in the negotiations that lie ahead.

"Firms are concerned over investment, hiring, and profitability. The Chancellor's Autumn Statement is a crucial opportunity to incentivise business investment and overseas trade."

The BCC said decisions on infrastructure projects would boost business confidence and support investment.

A separate report by business advisers BDO LLP said manufacturers were feeling more "bullish" about the economic outlook, while short-term confidence among service firms had been hit.

After a difficult two years, sterling's weakness has made manufacturing more competitive overseas - boosting exports, a study found.

Spokesman Peter Hemington said the Government needed to announce a trade-friendly Brexit plan.

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