Over half of European businesses view Brexit as a threat, compared to 39% who see it as an opportunity, while 41% think the UK’s exit from the EU means it is now a less attractive investment destination according to a poll conducted for RSM.
The research undertaken amongst some 700 European middle market businesses also found 14% of European businesses say they are already feeling the effects of Brexit, with twice as many (32%) expecting to be affected once the separation is complete.
Of those European businesses who will be affected by the vote to leave the EU, 58% expect the cost of doing business to rise and 50% expect a hit on their bottom line, the research found. Moreover, these businesses are concerned about the effect the Brexit vote will have on their suppliers, with 42% expecting it to have a negative impact in the years to come.
Continued access to the single market is the number one priority for European firms with operations in the UK, cited by 29% followed by tax incentives (22%) and free movement of labour (22%).
Anand Selvarajan, regional leader for Europe, RSM International, said: ‘The UK’s decision to leave the EU is not just a challenge for British businesses but for companies across Europe, uncertain about what Brexit means for their international ambitions.
‘Indeed 25% of respondents who intended to invest in the UK reported that the decision is now under review, with 9% saying they have been approached by organisations looking to attract investment into other EU states following the UK’s decision to leave.’
Separately, the Confederation of British Industry (CBI) says a new poll of its members confirms that the UK needs a ‘whole economy’ approach to make a success of Brexit, and warns that many of the impacts of leaving the EU will be felt across many different industries.
Carolyn Fairbairn, CBI director-general, said: ‘While each sector has issues specific to them, there are many crossovers and common principles that unite them, for example the need to avoid cliff edge changes that cause disruption to supply chains and trade.
‘Where companies differ is how they prioritise these issues and the contrasting emphasis they place on trade, migration and regulation. To make a success of Brexit for the whole economy, government needs to work through all these issues, as well as seize the opportunities afforded by a new focus on the UK’s global economic relationships.’
The CBI has identified six common principles as business priorities. They are:
- A barrier-free relationship with our largest, closest and most important trading partner
- A clear plan for regulation that gives certainty in the short-term, and in the long-term balances influence, access and opportunity
- A migration system which allows businesses to access the skills and labour they need to deliver growth
- A renewed focus on global economic relationships, with the business community at their heart
- An approach that protects the social and economic benefits of EU funding
- A smooth exit from the EU, avoiding a cliff-edge that causes disruption