AXA Business Insurance – one of the UK’s biggest insurers of small firms – reveals the results from its three-year tracker of Brexit sentiment amongst small firms. The data is significant as the businesses represented fall solely in the 0-9 employee category which make up 95 per cent of UK companies today (accounting for 5.4 million).
When asked in this month’s survey1 to envision how Brexit is most likely to affect their own business prospects, the gap closes somewhat, as 28 per cent anticipate a positive impact, and only slightly more – 31 per cent, expect a negative impact. Most small businesses say they cannot make a judgement as yet.
Small building firms, who are mostly sole traders and have the strongest history of pro-Brexit sentiment in AXA’s tracker, emerge as the most optimistic about their prospects: 46 per cent say that Brexit is most likely to have a positive impact on their business (half that number – 23 per cent expect a negative influence).
At the sharp end of the anxiety spectrum, 9.8 per cent of small business owners say they have considered quitting self-employment due to worry about the Brexit outcome. In the food, drink and retail sectors that reaches a peak of one in five (22 per cent average), but is lowest amongst self-employed people working in the creative industries who tend to be most location independent.
Overall, recruitment plans are down on this time last year – ten per cent of small firms expect to hire in 2019 (compared to 13 per cent in November 2017). Investment plans have taken the biggest hit, as 17 per cent say they will plough money back into their firm next year, compared to 41 per cent this time last year.
Even though cutting red tape was a stated goal of the Brexit campaign, just 12 per cent of small firms believe they will see any reduction in regulations after leaving the EU. Rather, the most common expectation is that their customers will suffer a squeeze on their incomes. A sizeable minority supported the view that Brexit would mean more work for British citizens as opposed to migrant workers.
1) “My customers will have less money to spend” (32 per cent). For comparison, just one in ten expected to see business boosted.
2) “Materials, goods and services I need for my business will be more expensive” (25 per cent)
3) “More jobs for British workers” (21 per cent).
“We need to remember that we have this blanket term ‘SME’, which covers both a sole trader with a van or a freelance designer working from home as well as manufacturers with up to 250 employees. Our survey focuses purely on the most common business type we have in this nation of entrepreneurs – those who work alone or have a small staff of under 10 employees. What they are telling us looks very different from the sentiments regularly expressed in the media, and I think it is worth highlighting that life post-Brexit may look very different to a microbusiness from how it looks to a mid-sized business” – Gareth Howell, Executive Managing Director, AXA Insurance UK plc.
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