Whilst the details of how and when Brexit will happen are still unclear, British employees and businesses are already feeling the impact.
We conducted a survey with YouGov which asked workers across Great Britain how their job security has been effected by the current uncertainty.
People are clearly concerned over the impact that Brexit, and the continuing uncertainty, is having on their current employment.
30% of those surveyed claim that Brexit has so far had a direct negative impact on their job security. This could have included; having their hours reduced, wages cut back or even redundancy.
For those self-employed, this includes threats to the sustainability of their business.
In comparison, only 3% feel that Brexit has positively impacted their working lives.
When comparing the data across a range of sectors, those working in the construction industry showed the most concern over the impact of Brexit so far.
38% reported experiencing problems as a direct result of Brexit, compared to only 5% who feel the industry has benefited.
Given that problems in housing construction were one of the first signs of the recession in 2008, should we be concerned that similar patterns show signs of repeating?
Holly Andrews, Managing Director at KIS Finance:
“The property development market has been adversely affected by the uncertainty surrounding Brexit. Developers are currently siting on land, reluctant to invest further until a clearer picture of the future economic landscape emerges.
This delay is costing them by both tying up capital and postponing future development income. Developers and also struggling to find an adequate supply of labour, with Brexit leading to many Eastern Europeans choosing to return home
In the residential property market we have seen a sharp increase of around 20% in the number of secured loan applications, as people are choosing to sit tight in their current property and make improvements rather than move house at this time.
We’ve also noticed that high end properties in the £750,000 plus market are taking far longer to sell, with the most expensive houses taking longest. It was this slowing down at the top of the property market that heralded the beginning of the last recession, which then slowly trickled down through the housing market. Markets need certainty to flourish and problems are likely to continue until we see some resolution to the current Brexit situation.”
Closely following the construction industry, 37% of those in the media, marketing and advertising have reported experiencing a negative impact on their profession as a direct result of Brexit.
Does this demonstrate the beginning of further cut backs with businesses being unwilling to commit to non-essential expenditure?
With no clear outcome in sight, the future for many businesses remains uncertain. This is leading to delays in investment, potentially causing a knock-on effect within other industries.
We spoke to Nick Evans, chairman of ExtraMile Communications Ltd, a multilingual and international marketing agency operating from Staffordshire and London. ExtraMile have 14 multilingual global clients plus numerous single language clients.
“Brexit has most definitely had a negative impact on our business. When the result of the Brexit vote was announced, ExtraMile IMMEDIATELY lost two clients whose businesses were new initiatives that were working across borders and would have been based in the UK creating employment in the country.
Secondly, we are finding that both existing and new clients are taking longer to come to decisions about new contracts. We have the impression that they are waiting to see what happens with Brexit before committing to anything - particularly in the case of larger scale projects.
Given that many businesses are in a “wait and see” mode, where they are nervous of the outcomes of the Government’s negotiations with the EU, it’s important to understand that such delay impacts on all aspects of business, whether national or international. Supply chains, access to workforce and the ultimate production of finished goods and services are all impacted when the business community pauses and holds its breath.
We spoke to Robbie Toan who is the managing director of Assured Pharmacy which is an online pharmacy specialising in men’s health.
“So far we have not been directly affected by Brexit, but we have to prepare for a worst case scenario due to the uncertainty of it all, and we’re doing so by stockpiling our medication.
Typically we would hold 500,000 of our most frequently requested medication (1 month to 6 weeks of stock), but as we move closer to Brexit’s deadline with no concrete evidence of what this has in store for business we have begun stockpiling 1.5 million of these tablets (seven months’ worth of stock) which this has had an impact on our cash flow.
Our business is built on loyal repeat patients; if we can’t supply the demand, we lose their business so we are stockpiling to ensure that we can keep our patients happy and avoid any shortages.
The extra stockpiling has cost the company £500,000 which is unusual for a company of our size, and it has meant we’ve had to expand our storage facilities, costing an extra £25,000 a year.”
Over twice as many of those self-employed said they are experiencing positive effects from Brexit, compared to employees.
Although the percentage is small, some business owners have been able to take advantage of changes in a way that employees haven't.
Some companies involved in exporting goods have been able to benefit from the falling exchange rates, positively impacting their profits.
We spoke to Nikki Hesford who owns a marketing and advertising agency, Hesford Media, which has clients both in the UK and internationally.
“My international clients pay in their home currency, with a large number of them being in the US. Before Brexit, the exchange rate was 1.46 meaning we received £1369 for a $2000 fee. Now, at the current rate, we receive £1626 without it costing the client a penny more.
This artificial increase alone has generated around £1,500 extra in profit per month.
In addition to this, our UK clients (mostly product businesses) have benefited from exporting their products, priced in pounds, as they are now an absolute bargain to euro and dollar buyers. So, they are receiving huge uplift in international sales so as a result they are increasing their ad spend dramatically. One client has literally tripled advertising spend in America to capitalise on the weak pound.”
The data suggests that, until we have clarification on exactly how and when the UK will leave Europe, businesses will continue to struggle and job security will remain under threat.
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Last updated: 31 January 2019 | © KIS Finance 2018 |