From the UK vote to leave the European Union to Donald Trump’s divisive election victory in the US, the past year has seen a lot of political upheaval. Despite economic uncertainty sparked by these events, a study of 1,000 businesses across the UK reveals two in three entrepreneurs believe Trump’s win would either be positive or have no impact on business with just 18 per cent predicting a negative outcome.The study by business centre operator, Citibase, also reveals that more SMEs surveyed were mostly in favour of a soft Brexit (42 per cent) compared to a cut-and-dry departure from the EU (33 per cent).
London SMEs in particular expressed a keen interest to keep closer ties with the European Union post-Brexit than the rest of the UK.
Business confidence on the up
The Citibase study suggests there was some more good news for the future of the British economy. Many more SMEs (33 per cent against 20 per cent) have a positive 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, and while three in four have said their revenues have either increased or not changed since the decision to leave the EU.
Another study by salary research site Emolument.com, looked into business outlook in the UK and the US. 475 professionals were asked if they thought their company was likely to perform better in 2017 than it did in 2016, and the figures suggest a lot of confidence in what the year may bring in the form of business opportunities for growth.
2016 has been a strong year for the US economy, with the lowest unemployment rate in a decade, but American professionals expect 2017 to be even better : 81 per cent think the first year of Trump presidency will improve their business’ outlook.
In the UK, most professionals (59 per cent) believe 2017 will be better than 2016, but they still rank second to last in the global study, behind Russia and France. Uncertainty around the impact of Brexit negotiations may well have clouded the horizon for many professionals, especially with large banks announcing substantial transfer of staff overseas in the last few weeks.
“Uncertainty is a dampener when it comes to business outlooks for 2017. Countries with key electoral deadlines – such as France – still looming on the calendar are fearful of the impact of new policies, while countries which have already jumped the hurdle, such as the US, seem to embrace the new order with more optimism,” Emolument.com’s co-founder and COO, Alice Leguay said. “The UK however, despite having already voted for Brexit last June still grapples with blurred vision generated by this decision: UK professionals have wildly divergent outlooks for 2017, mostly based on their industry sector.”
The “Trump effect”
In the UK, expectations vary greatly by industry and employees’ level of seniority, with millennials and technology professionals being particularly optimistic. In the US, results show an overwhelming confidence: 81 per cent of professionals expect their business to do better under the first year of Trump presidency than in 2016.
Meanwhile, the Citibase study shows that ‘hard Brexiteers’ believe the Trump will have less of a negative effect on their business with 20 per cent expecting a positive impact on their business.
The feeling towards the impact of Trump also differed dramatically throughout the UK. One in four SMEs in the North East are the most confident about their business with Trump in the White House, while Wales and Scotland remain the most wary of the “Trump effect”. London SMEs are split equally between those that think it will be positive (18 per cent) and negative (19 per cent). Most appear to be indifferent what’s happening stateside.
UK’s technology sector is to boom
The UK startup and technology scene has been thriving in the last few years, and those surveyed retain confidence in the sector’s organic growth, expecting it to cancel out any Brexit fallout. 83 per cent of employees working in the British web industry expect 2017 to be better than 2016, and 77 per cent of those working in technology agree.
Retail: are the good times already over?
While 2016 was a record year for UK retailers, this golden era is not expected to last by those in the industry. With a lower pound and uncertainty over the UK’s access to the single market, retail professionals are more pessimistic than other employees. 60 per cent believe their business will not do better in 2017.