As the date of a UK referendum on European Union (EU) membership approaches, British Euro-sceptics are busy drumming up support in favour of Britain’s withdrawal from the EU. As the arguments against such a move are primarily of an economic nature, we wondered what the business community thinks about this. To answer this question for us, the Economist Intelligence Unit carried out a survey for us, the results of which you can read here now.
Main findings of our survey:
- Four fifth majority of British and German Business representatives against Brexit
- In case of a Brexit decreases in revenues, investments and jobs are prophesized
- Nearly a third of Business would either decrease or relocate capacities away from the UK
A resounding YES for Europe
Our survey was conducted with 782 high level business representatives in total, 404 of which belonged to companies headquartered in the UK while 378 were based in Germany. It was also conducted across several sectors, the four largest of which were: Finance, consumer goods/retail, it/technology and production. Surprisingly, neither national background nor sectoral affiliation seemed to have much of an influence on the respondents’ opinion about a potential Brexit. A striking four fifths (79%) of all respondents said the UK should remain part of the EU following the upcoming referendum. Such a strong result comes especially surprising since for our survey we went with the assumption of a “best case scenario” for the UK. In such a scenario the United Kingdom would only leave the EU as a political entity, would however retain its access to the full European single market. Our survey also shows that such access is by far the most important benefit associated by respondents with their countries’ EU membership. One can imagine then that with a scenario where Britain could lose such access, respondents’ opinions would be even more adamantly against a Brexit.
Asked though about their estimation of likelihood of a coming Brexit opinions diverge. Just as many people seem to believe a Brexit will come as there are people thinking the Brits will ultimately say no to a Brexit.
Respondents paint a grim picture in case of a Brexit
According to those companies surveyed on both sides of the Channel, they fear that even the partial exit from the EU would give rise to significant adverse effects for the economy. 42% of respondents foresee negative or even very negative effects for their respective job markets; only 13% believe that such a move would have a positive impact on national employment rates and unemployment levels. At 44%, these fears are somewhat more pronounced in the UK than in Germany with a figure of 39%.
Business leaders are concerned about a number of negative effects for their own economic sectors, with 38% of respondents worrying about a negative impact on sales, 33% concerned about changes to investments and 34% citing employment issues. The results show that companies in the United Kingdom are more pessimistic about the situation than those in Germany.
Many respondents also see these issues as a real threat to their own companies. Three years after a United Kingdom exit from the EU, 36% expect a decline in sales, 31% a drop in investment and 29% envisage that there will be negative consequences for a number of employees in their companies.
Interesting, while most upset with complex regulations through the EU, in our survey, the finance sector was also predicted the most negative outcomes from a Brexit
Nearly a third of businesses threaten to downsize or relocate
Perhaps most alarming were the respondents’ predictions when asked about their companies’ reactions to a potential Brexit. Almost a third (29%) of all companies surveyed in both countries say they want to either reduce capacity in the UK or relocate elsewhere, a figure that applied equally to German companies (29%) and British (28%) alike. The IT sector leads the way with 41% of respondents expressing these policy intentions, followed by 33% of financial institutions, who expect a reduction or relocation of capacity away from the UK.