Brexit impact

Brexit: first sign of a ‘hit to jobs’: IoD survey

By Michael Stones

- Last updated on GMT

Brexit will be bad for business, agreed nearly two-thirds of respondents
Brexit will be bad for business, agreed nearly two-thirds of respondents

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The first signs of Brexit’s short-term impact on the UK economy were highlighted in a survey from the Institute of Directors (IoD), which revealed nearly two-thirds (64%) of IoD members thought that quitting the EU would be negative for their business.

The survey – conducted after the shock referendum result on Friday (June 24) – also revealed that 23% of respondents thought the result would be positive for their business, while 9% thought it would make no difference.

A quarter (24%) of those taking part planned to freeze recruitment and nearly a third (32%) intended to keep recruiting at the same pace.

Of the firms responding to the survey, 5% planned to make redundancies.

Planned to make redundancies

More than a third (36%) of IoD members said the referendum result would cause them to cut investment in their business. That compared with 9% who planned to will increase investment.

Nearly one half (44%) of firms surveyed said the result would not change their investment plans.

A quarter of firms (22%) reported considering moving some of their operations outside the UK. Only 1% of businesses said they intended to bring operations back to this country.

IoD director general Simon Walker said the results revealed the anxiety among the organisation’s members.

“Businesses will be busy working out how they are going to adapt and succeed after the referendum result,”​ said Walker.

“But we can’t sugar-coat this, many of our members are feeling anxious. A majority of business leaders think the vote for Brexit is bad for them, and as a result plans for investment and hiring are being put on hold or scaled back.”

‘We can’t sugar coat this.’

Three quarters (74%) of business leaders agreed that the priority should be protecting the economy from negative reaction in financial markets.

The next priority should be securing a new trade arrangement with the EU.

More than half (51%) of firms thought forging a good deal was more important that concluding an agreement quickly. Nearly half of IoD members worried the rest of the EU would react negatively to the UK in negotiations.

Walker drew a positive conclusion from the survey results. “There is no point crying over spilled milk. We will not lose our faith in the ability of British firms to overcome these obstacles.

“But these results highlight the importance of the Bank of England maintaining stability in the financial system. It is crucial that the banks do not starve businesses of cash.”

Businesses have a clear message for David Cameron’s successor as prime minister, he added. “During the referendum campaign we were promised an open and outward-looking country after Brexit, now it must be delivered.”

The IoD, which did not campaign during the referendum, received results from 1,092 members between June 24– 26.

Read more about the survey on the IoD’s website​.

The shock Brexit result sparked turmoil in world financial markets on Friday (June 24). At one point, the influential FTSE 100 index tumbled by more than 8% before rising to close about 3.2% lower.

Meanwhile, in the Food Manufacture Group’s ​pre-referendum poll, 58% of respondents thought business prospects​ would be brighter within the EU.

IoD Brexit survey – at a glance

  • 64% judged quitting the EU will be negative for their business
  • 23% thought the result would be positive for their business
  • 24% planned to freeze recruitment
  • 32% reported recruitment would be unaffected
  • 5% planned to make redundancies

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