Close Brothers Asset Finance conducted a survey of 900 small and medium-sized businesses, of which 40% exported to Europe and 29% anticipated they would suffer from reorganisations to the supply chain in a post-Brexit world.
More detailed results found that SMEs with a higher turnover were more likely to be planning ahead of the Brexit deadline on 29 March 2019: only 25% of SMEs with a sub-£250,000 turnover had begun planning, but 57% of enterprises with £10m or more in sales said they had begun preparations.
“This forward thinking is typical of the enterprise shown by the UK’s SMEs,” said Close Brothers chief executive Neil Davies. “It clearly demonstrates that in the absence of certainty, businesses have taken it upon themselves to assess the impact leaving the EU will have on the supply chain, which for many businesses exposed to Europe, is critical.
“In the key sectors that have strong relationships in – and with – Europe, including engineering, manufacturing and transport, planning is advanced and above the national average of 47% who admitted they’d started their planning.”
Among companies in the print and packaging sector, 12% believed they would benefit from a reorganised supply chain and 27% anticipated they would suffer, however 62% said that the impact on their business would likely be neutral.
Merthyr Tydfil-based printer Stephens & George currently falls in with the larger neutral contingent, with managing director Andrew Jones anticipating “no impact whatsoever”.
He said: “Our paper, plates and ink come from suppliers within the European Union, but we do not send anything back in exports. I do not see why we would have problems getting these things into Britain after Brexit, seeing as we import plenty from non-EU countries.
“Though I do not envisage wagons from the EU suddenly being halted at customs, the topic is on the agenda with our paper supplier at an upcoming meeting. We are considering increasing our stock holding onsite, but we will hear what they have to say first.
“As the talks have worn on I have ended up more on the side of leave than I even was when I voted in 2016. The EU needs us as much as we need them, and businesses should be left by the government to deal with their own side of things if they cannot provide a clear picture.”
The lack of clarity on the situation in Ireland was a cause for concern at Belfast digital printer Northside Graphics, which trades with businesses in the Republic of Ireland, and remains a continued point of contention in the government’s talks with the EU.
Managing director Gary White said: “Although 58% of Northern Ireland voted to remain, we are part of the UK and must go along with the decision. However, we are very nervous at the moment because Brexit could potentially have a massive impact on us.
“We need clarity sooner rather than later, especially on the border question. We also had to put plans to export to France, Germany and Spain on hold after the vote to leave.
“The government must begin to think about everyone who will be affected – whatever side they took, 100% of UK residents will be impacted by Brexit. We have started talking to our paper supplier about looking at different supply routes, but any moves anyone makes could turn out to be a waste of time as we continue to do all of this in the dark.”
