Our Quarterly Tracker records businesses’ views about their key business drivers, prices and costs.
In the winter update, businesses report a decline in their one, three and six month order books, with both domestic and international sales affected.
Meanwhile the number of respondents telling us about increases in import prices and exchange rate costs have risen to levels seen earlier in 2018 after brief dips.
Sources of negative impact
Businesses are still most likely to worry that Brexit will have a negative impact on their activity in the next 12 months, with 44% fearing they could be adversely affected as a result.
A similar proportion (44%) are concerned about the potential impact of an economic slowdown in the UK, but there’s been a slight drop in those who see Sterling fluctuations (36%) or increased protectionism (19%) having an impact.
Changes made as a consequence of Brexit
While heightened Brexit concerns might have been expected to prompt businesses to do more contingency planning, the political discussions around the possible Brexit outcomes may have made this more difficult; only 50% report they have contingencies in place.
The Winter 2018 Trade Barometer shows that business planning for Brexit has fallen back slightly compared to previous results, and businesses and levels of changes businesses have already implemented as a consequence of Brexit have also fallen across different metrics. Opening non-sterling bank accounts remains the most common course of action.
Brexit concerns for trade and supply chains
The potential impact of Brexit worries both domestic and international businesses, but the former are less concerned.
Just 16% of domestic businesses are worried about lower trade with the EU following Brexit, against 35% for international businesses.
Amongst domestic companies, tariffs on goods imported as a part of their supply chain (18%) is the most commonly cited concern.
Additionally, we find that those businesses that are about to start trading internationally over the next 12 months are the ones most concerned about tariffs on EU sales (36%), compared to domestic or international businesses.