Business confidence in the UK has plummeted following the vote to leave the European Union. The YouGov/Cebr Business Confidence Index, which measures businesses’ outlook, was at 112.6 in research undertaken just ahead of the referendum and fell to 105.0 in research carried out in the aftermath of the referendum. The negative outlook among UK businesses may be a knee jerk reaction to the Brexit vote rather than an attitude that will persist in the long term.
The share of businesses that are pessimistic about the economic outlook over the next 12 months doubled from 25% to 49% in the course of a week. Meanwhile gloominess about businesses’ own outlooks increased by ten percentage points over the same period (moving from 16% before the referendum to 26% after it).
Businesses are also increasingly pessimistic about their operations in the year ahead following the vote with hopes for domestic sales, exports and capital investment dropping sharply. The index tracking expectations for domestic sales fell by almost 14 points in a week (from 118.8 to 104.9), hopes for exports declined by 15 points (from 115.3 to 99.8) and investment dropped off by almost eight points (from 108.0 to 100.1).
Scott Corfe, Director at the Centre for Economics and Business Research: “So far the only evidence we have for how the economy is in the wake of the Brexit vote comes from the markets which are showing a mixed picture. These figures show what is happening on the ground and they suggest a significant shock reaction. Not only are businesses feeling much more pessimistic in general about the state of the economy, but their own expectations for domestic sales, exports and investments over the next 12 months have gone off a cliff. Hopefully this is a short term panic reaction and confidence will edge up again once the dust settles.”
Stephen Harmston, Head of YouGov Reports: “Last week we saw consumer confidence drop off as a result of the Brexit vote and this week we can clearly see the impact of the referendum result on businesses. As with consumers, a large part of this comes down to the sense that no one has a plan, no one knows what is going on, and no one really knows what happens next. What all the players in the economy are searching for at the moment is certainty. The Bank of England has reassured the markets to an extent but businesses and consumers now need to feel the same.”
To find out how to access Cebr and Yougov’s comprehensive business and consumer confidence data, please contact Scott Corfe on firstname.lastname@example.org or +44 (0)20 7324 2843