Brexit, economic slowdown and Business Recovery Specialists
Here at Business Recovery Specialists we aim to help SME businesses in difficulties recover and start trading profitably again before insolvency and winding-up looms. We’ve been keeping a close eye on how businesses might be affected following the Brexit referendum. It is still early days, and there are conflicting reports about the magnitude of the impact. This article looks at some of the recent predictions. If your business is starting to feel the effect of Brexit, the sooner we are contacted the better. This is because there will be more options available we will be abke to do more to help.
Slowdown Rather Than Recession?
The National Institute of Economic and Social Research (NIESR) was reported in early August as saying that the country will go through a “marked economic slowdown” this year and next. They went on to say that there was a 50/50 chance of a recession within the next 18 months.
They go on to say that, overall, the UK economy will probably grow by 1.7% in 2016. The predicted growth rate in 2017 is 1%. A recession is defined as two successive quarters of negative economic growth. This prediction, therefore, is not suggesting a recession, rather a slowdown, which are two very different things.
Of course, predictions can (and quite often are!) wrong. However, from what we are seeing, this is nothing like the credit crunch recession of 2008/2009. More than anything we are seeing financial uncertainty in business. Although economy wide, the picture might not yet be as concerning as some commentators predicted, businesses will still come under pressure as spending and investment decisions are put on hold whilst people wait to see what is happening. So whether your business is facing creditor pressure, cash flow problems or finance and investment difficulties, we can help.
What Does Lack of Confidence Mean?
A report by the Confederation of British Industry (CBI) has predicted that small and medium-sized businesses are likely to see a fall in orders over the next 3 months or so. They report that this is a direct consequence of the uncertainty surrounding business since the Brexit Referendum.
In a separate report, the CBI goes on to say that the UK’s small and medium-sized manufacturers (SMEs) fear they will be hit by a fall in orders in the next three months. Interestingly, however, the 472 firms surveyed said that current orders were stable. They were, however, feeling less optimistic about the immediate future and were likely to scale back some investment plans in machinery and plants.
The only conclusion we can draw now is that uncertainty will lead to a slowdown in the short term.
As Business Recovery Specialists, We Can Help
Although the UK wide position does not seem as gloomy as some early post Brexit predictons suggested, there is little doubt that some good businesses will be affected by this uncertainty. Perhaps tighter cash flow might lead to creditor pressure or pressure from banks or other financial institutions. Possibly barriers to growth and expansion will emerge as finance and investment decisions are delayed. Some businesses might be able to ride these problems out. For others it might present more serious problems.
Our advice is don’t wait until the problem does become serious and unmanageable. Our experienced team of Business Recovery Specialists can help. Contact us or call us on 0333 222 8065. The sooner you call us, the more we can do to help.