29% Of UK Companies Are Contemplating A Brexit Related Move Abroad

Further to our recent article on Brexit uncertainty, a new survey by the Institute of Directors (IoD) has found that 29% of UK companies have either already or are actively contemplating a Brexit related move abroad, mostly to other EU countries

A Brexit Related Move Abroad

The Institute of Directors surveyed 1202 company directors between the 17th-19th January 2019. They found that:-

• 11% of UK companies had already moved or activated plans for a Brexit related move abroad, involving relocating at least part of their operations to another country, mainly another EU country. 21% of large firms fell into this category, compared with 15% of medium sized firms, and 8% of small firms
• 5% of UK companies were actively planning to relocate abroad due to Brexit
• 13% of UK companies were actively considering a Brexit related move abroad. Within this category, 15% of small firms were considering a move, compared with 10% of medium sized firms, and 7% of large firms
• 6% of UK companies had moved at least part of their operations abroad, for reasons other than Brexit
• 62% of UK companies had no plans to relocate abroad in relation to Brexit
• 40% of exporters and 39% of importers have either already or are actively contemplating a Brexit related move abroad

What these statistics show is that where a firm is actively contemplating a Brexit related move abroad, then the larger the firm, the more likely they are to have either already moved or activated plans to move abroad. In contrast, the smaller the company, the more likely they are to still be considering a move, without actually having activated any plan to do so. 

In terms of where the companies are relocating to or contemplating moving to, 69% are or are thinking of moving to another EU country, 22% are or are thinking of moving some operations to another EU country and/or to a country outside the EU, whilst just 7% are either relocating or thinking of relocating to a non-EU country

Nissan

Having received "assurances" from the UK Government back in 2016, Nissan confirmed back then that their new X-Trail was to be built at their Sunderland plant, as well as its Kyushu plant in Japan. However, today Nissan confirmed that the X-Trail would now be built exclusively in Japan.

Nissan's Europe chairman, Gianluca de Ficchy, stated: "The continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future."

Comment

In response to the fact that 29% of UK companies had either already or were actively contemplating a Brexit related move abroad, Edwin Morgan, the Interim Director General of the Institute of Directors, stated: "It brings no pleasure to reveal these worrying signs, but we can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies. Change is a necessary and often positive part of doing business, but the unavoidable disruption and increased trade barriers that no-deal would bring are entirely unproductive. While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad. For these firms, typically with tighter resources, to be thinking about such a costly course of action makes clear the precarious position they are in. We still have a chance to stem the flow, and provide enough certainty to the firms that are considering moving but haven’t yet done so. The UK’s hard-won reputation as a stable, predictable environment for enterprise is being chipped away. Our political leaders must keep this in the front of their minds as we enter this critical phase of negotiations."