More firms prepare for Brexit as confidence and optimism decline

These are some of the findings of the latest Business Panel Survey, commissioned by Highlands and Islands Enterprise (HIE).

The survey was carried out between early February and early March 2019. Of the 1,001 businesses who responded, almost half (49%) felt leaving the EU presents a significant risk to their business, and less than a fifth (17%) felt it would bring new opportunities.

However, 77% were confident they would be able to adapt to the consequences of leaving the EU. Nearly half (48%) said they had taken at least one action to help them prepare, with a further 17% planning similar steps.

HIE’s previous survey carried out in September/October last year, reported only 17% of businesses were planning for Brexit, leading to the agency calling for more firms to do so.

Meanwhile, businesses’ confidence in the Scottish economy fell to its lowest level since the surveys began in 2016, with 44% of firms now saying their confidence had decreased over the past six months.

However, businesses continue to report good (40%) or steady (41%) performance over the past 12 months. Larger companies (25 or more employees), tourism related businesses and firms that trade internationally were more likely to have performed well.

There was also a decline, from 80% to 70% since October, in the proportion of businesses that are optimistic about their own prospects.

Declining confidence was particularly evident among businesses in the food and drink sector, where firms were also more likely to have struggled. This sector was also more likely to view Brexit as a significant risk (61%) and less confident they could adapt to the consequences.

Carroll Buxton, HIE’s director of regional development, said:

“It’s certainly encouraging to hear that more firms appear to be planning for Brexit and that most of those who took part in the survey are confident they can adapt to the UK leaving the EU.

“While the Brexit timescale has changed since the survey was carried out, it is still crucial that companies plan for the impacts. There is a range of resources available to help them do so, through the Prepare for Brexit website, and we would encourage firms to investigate this.”