But, business priorities shifting as Brexit talks begin
The latest results from Zurich’s SME Risk Index reveal that UK business risk climbed between Q3 2016 and Q1 2017. The Index of over 1,100 UK SME owners now sits at 38.81, a rise of just over six percent from its all-time low of 36.72 six months ago.
Concern about the UK’s economic and business environment has risen across the board, with increases registered across every single economic indicator. Among the greatest risers were supply chain exposure, up 11 percent, and workforce challenges, up seven percent, both of which may be indicative of business leaders’ anticipation of conditions in a post-Brexit Britain.
The UK’s SMEs remain resilient, however, and many business leaders appear to feel well equipped to deal with any headwinds. Despite acknowledging an increase in risk across all economic indicators, business leaders’ perception of risk facing their own business now compared with last financial quarter has plummeted 15%.
Index results related to areas of opportunity for businesses reveal evidence suggesting that business leaders are starting to factor Brexit into their plans in earnest. For example, business leaders seeing opportunities to expand the workforce remain at all-time low levels, down a third (33%) from this time last year.
Equally, perceptions of access to overseas markets as a business opportunity have fallen steadily over the last 12 months, and are now considered a business opportunity by over a fifth (22%) fewer than this time last year.
Under the surface, the statistics uncover a number of international issues at the forefront of SME business leaders’ concerns. Concerns about currency fluctuation and exchange rates, and concerns about international trade risks, such as sanctions and foreign regulations, are now at an all-time high. Nearly one in four (24%) highlighted currency and exchange rates as a chief concern, while one in ten (10%) SME decision makers voiced concern about international trade risks.
Paul Tombs, Head of SME Proposition at Zurich, comments:
“There is a sense now that the wind has changed. While the outcome of Brexit remains uncertain, business leaders are sensing that the landscape has shifted and are paying attention to the effect of international forces now more than ever.
“While change is in the air, it is extremely encouraging that businesses are not reporting any additional pressure compared with six months ago, or even this time last year. The success of small and medium sized firms is absolutely critical to maintaining a vibrant UK economy, and it is a good sign for the business environment that British business is not yet showing signs of distress.”