UK SMEs upbeat on ‘Trump effect’ according to Citibase Business Confidence Index showing just 18% think he will have a negative impact on business.
Over the past year there have been some huge political changes around the world, with the UK’s Brexit vote and Trump’s surprise election victory leading the way. These seismic worldwide events have led to almost everyone voicing an opinion, from political commentators to celebrities offering their view, however there has been a lack of hard […]
Over the past year there have been some huge political changes around the world, with the UK’s Brexit vote and Trump’s surprise election victory leading the way. These seismic worldwide events have led to almost everyone voicing an opinion, from political commentators to celebrities offering their view, however there has been a lack of hard facts and concrete information on the subject.
SMEs are the lifeblood of the UK economy and, as a champion of SMEs, Citibase, the UK’s largest independent operator of serviced business centres, commissioned a regular activity tracker of over 1,100 small businesses to gauge their real opinions on the economic impact of Trump’s US election win and the Brexit vote here in the UK.
In contrast to many opinions that we have read the results were mostly positive, with two thirds of those surveyed believing Trump’s win would either be positive or have no impact on business with just 18% predicting a negative outcome. This shows that UK SMEs are putting negative sentiments behind them and focusing on trying to grow and develop their businesses.
Across the country more SMEs surveyed were mostly in favour of a soft Brexit (42%) compared to hard (33%). However, in London, those wanting soft Brexit jumped to over half of all those surveyed (54%). This indicates that London SMEs are keener to keep closer ties with the European Union post-Brexit than the rest of the UK.
Steve Jude, CEO, Citibase commented: “SMEs are the heartbeat of the UK economy and we have found that both Trump, and the impact he is having on the world, along with the confusion surround the UK’s Brexit strategy has been mostly water off a duck’s back for our country’s SMEs. When it comes to the type of relationship SMEs want with Europe, opinions are mostly in favour of a ‘soft’ Brexit, which is timely with the fluctuation of sterling due to ongoing Brexit discussions.”
Other findings from the survey show that ‘hard Brexiteers’ believe the US president elect will have less of a negative effect on their business. Those in favour of a hard Brexit say there will be no impact (61%) or a positive impact (19%) from Trump’s rise to the White House. SMEs that prefer a soft Brexit are more likely to believe a Trump presidency will have a negative effect (29%).
The feeling towards the impact of Trump also differed dramatically throughout the country. SMEs in the North East are the most confident about their business with Trump in the White House with 26% of those surveyed positive about his impact. The regions most wary of Trump are Wales (36%) and Scotland (26%) predicting a negative impact on business, while London SMEs are split equally between those that think it will be positive (18%) and negative (19%).
The uncertainty surrounding Brexit has also altered the length of office contract SMEs prefer with a jump (57% to 59%) in those favouring a short-term agreement of less than three years; and a jump from 25% to 29% for those looking for less than one year’s commitment.
Jude added: “2016 was a year of significant political change with the UK Brexit vote followed by a Donald Trump US election win. No one can predict the future, however with all this political uncertainty, it is unlikely a business would sign up to an office for the long term. These SMEs crave agility to help manage risk and costs, allowing them to scale up and down easily in these fascinating times. What it has done though is increase their desire to move away from long term office contacts as why would anyone want to be tied down in these uncertain times.”
There was some more good news for the future of the British economy with many more SMEs (33% vs. 20%) having a positive rather than negative outlook for a post-Brexit Britain when the negotiations are over and the UK actually leaves the EU. The results also showed the Brexit vote had only a small negative effect on staff morale (17% vs. 54% positive or no change). While three quarters (75%) have said their revenues have either increased or not changed since the decision to leave the EU.
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