Brexit vote fails to deter firms from targeting EU

More than a third of UK businesses are planning to export more goods to Europe over the next five years despite the uncertainty caused by the vote to leave the EU, a study revealed today.

The British Chambers of Commerce study shows bosses are eager to increase exports. Picture: Torsten Blackwood/AFP/Getty Images

The research by the British Chambers of Commerce (BCC) found that almost one in five firms planned to allocate more resources to sourcing products and services from Europe. One in three said they were looking to increase exports generally as a result of the referendum, which has seen the pound tumble, making UK goods and services more competitive overseas.

The BCC said the results of the survey, which polled nearly 1,500 business people, showed that UK companies continued to regard mainland Europe as a key trading partner.

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Adam Marshall, director-general of the BCC, said: “These results are an important reminder of the fact that it is businesses that trade, not governments.

“Although the likely outcome of the Brexit negotiations remains unclear, businesses still see Europe as a primary market for both selling and sourcing inputs – even after the UK leaves the EU.

“Looking ahead, businesses want the best possible terms of trade following the Brexit negotiations, whatever the ultimate model adopted.

“UK firms want tariffs, costly non-tariff barriers, and product standards to be at the top of the government’s agenda for a future EU trade deal.”

He added: “The best news from this survey is that the EU referendum outcome has sparked a greater interest in foreign markets for a significant number of firms.”

The study was published as a new report suggested that Britain’s mid-sized businesses grew faster, generated greater profit growth and created more jobs in the last 12 months than their larger and smaller counterparts.

Yet, despite leading the economy, mid-sized businesses risk being overlooked as the UK prepares to leave the EU, according to accountancy and business advisory firm BDO.

Its research shows that medium-sized companies created 780,000 jobs last year, more than smaller businesses (135,000) and FTSE 350 companies (320,000) put together.

Financial results tell a similar story, with mid-sized businesses increasing revenues and profits by 3.8 per cent and 19 per cent respectively, while smaller firms and FTSE 350 companies suffered collective declines.

Paul Eagland, managing partner at BDO, said: “High-growth mid-sized businesses played a leading role in the UK economic recovery after the global financial crisis.

“With Brexit and more uncertainty looming, this is the time for the government to engage with this part of our economy and draw on their natural energy, ambition and entrepreneurial spirit to create a ‘new economy’.

“Despite being the economic engine of our economy, mid-sized businesses are often undervalued and overlooked.”