Globally business optimism is at its highest level on record, increasing by 23% in the past year, but over the same period the UK has seen a marked drop in optimism because of Brexit uncertainty, according to research from Grant Thornton
The firm’s latest international business report, a quarterly survey of 2,600 businesses in 36 economies found that overall optimism is up from 39% to 49% heading in to Q2 of 2017.
However, UK business optimism is down from 26% to 20%, marking a four-year low. Across the EU, since last quarter, there has been a collective rise in optimism from 34% to 39%. In addition, it appears that fear of political turbulence has not affected confidence in European countries where elections are set to take place: Germany (13%), France (4%).
The US has been the bolster to the global increase, with confidence levels surging from 54% in Q4 of 2016 to a 14-year high at 80%. At 48% (up 2% since last quarter), Chinese businesses are experiencing the highest levels of optimism since Q3 of 2015.
Robert Hannah, chief operating officer at Grant Thornton UK, said: ‘UK businesses need to identify and capitalise on Brexit opportunities. This may be achieved through an evaluation of processes and controls, re-structuring business models, accessing new international markets, utilising new trade deals or taking advantage of opportunities presented domestically.
‘Businesses need to determine where and how they will be impacted the most in order to effectively put in place the necessary steps to both mitigate risks and realise benefits.’
A third of UK businesses (36%) identify a skills shortage as a problem, and it is highlighted as the second biggest business constraint globally (1%).
Hannah said: ‘The looming threat that EU citizens may lose their rights to work in the UK is creating huge uncertainty for people and the organisations that employ them. This is not isolated to one sector alone, but can be seen from financial services to farms; from care homes to construction. A unilateral announcement by the government to secure EU workers’ rights to remain would be a strong positive signal to the market.
‘Globally, it would appear that businesses are getting in to their stride and adapting to a market where uncertainty is the only certainty. We now need UK businesses to follow suit and inject a new sense of confidence back in to the market.’
