How will 2017 shape up for businesses? The results from our recently completed survey of smaller, mainly owner managed businesses make for interesting reading.
This time last year, these businesses were reporting challenges in accessing finance. The survey results just in are dominated by the reaction to the current political elephant in everybody’s boardroom, Brexit.
The results are mainly positive though.
An overwhelming majority say that they would still establish their business in the UK if offered the chance to start again anywhere in Europe. Moreover, the majority have not felt any negative impact from the Referendum vote in the months since June.
That being said, the government will have a big job on its hands convincing entrepreneurs that their businesses will thrive amidst the uncertainty of the next few years.
Over half of businesses surveyed believe that the fallout from the referendum will have negative repercussions for their firms over the next five years. Clearly, much will depend on being able to continue trading, unimpeded, into the EU.
It’s not all about Brexit though, businesses are clear that there are things the government can do now to help boost growth.
Having access to the best possible skills from across the world will be an essential ingredient for new and existing businesses to succeed over the next few years, and hard-line mood music from ministers on curtailing migration is creating unease.
Businesses are also clear that keeping the UK on track with digital infrastructure improvements will be important in keeping them at the front of the global technology race.
Trying to predict how the business environment might be affected in 2017 is difficult, especially as indicators can be contradictory.
While consumer confidence had returned to pre-referendum levels in September, it went down in November. Meanwhile, retail sales jumped by nearly 6% in November compared with the same month last year, and inflation rose from 0.5% in June to 1.2% in November, its highest rate since October 2014.
The Bank of England has raised its forecast for economic growth in 2017 to 1.4% from 0.8%.
The fall in the pound will continue to help exporters but will also increase import costs for manufacturers.
Although it makes foreign holidays more expensive for UK tourists, it makes the UK a cheaper destination for overseas tourists. It will also encourage more of us to holiday at home but it remains to be seen whether the likely increase in tourism will assist East Midlands Airport, or the visitor economy in Lincolnshire.
The UK has created a healthy environment for entrepreneurs in recent years, and it’s still a great place to set up and run a business.
Brexit will inevitably pose challenges for all businesses, particularly in being able to recruit the right people to enable them to grow rapidly. New industries are providing opportunities for British workers, but specific skills in developing areas are always scarce. It’s not clear whether the about-to-be-introduced Apprenticeship Levy will enable businesses to more effectively recruit and develop their talent pipeline.
Even after the UK leaves the EU our immigration policy must remain open to the best and brightest from across the world.