SMEs in Greater Manchester are Unfazed by Market Turbulence and Brexit Upheaval

Survey From Duff & Phelps and Greater Manchester Chamber of Commerce Reveals Economic Optimism

Duff & Phelps, the premier global valuation and corporate finance advisor, today released a report in partnership with the Greater Manchester Chamber of Commerce. 341 businesses from Greater Manchester, together employing more than 50,000 people, responded to a survey on the business environment and the challenges and opportunities pre- and post-Referendum.

Despite initial uncertainty around the impact of the result of the EU Referendum, SMEs in Greater Manchester are upbeat about the outlook for the business environment, with 62% responding either positively or very positively when asked. Only 4% reported that their outlook was negative or very negative in the third quarter, compared with 8% in the second quarter ahead of the vote to leave, demonstrating solace after the decision on Brexit. In another sign that it is business as usual for SMEs in the region, the majority of businesses (51%) said that the vote to leave the EU had no impact on their investment intentions, and nearly three quarters stated that it did not affect their company’s overall decision making.

Encouragingly, access to funding has improved as 49% of respondents said it was easy or very easy to access funding in the third quarter of this year, compared with 39% in the second quarter. Paul Smith, Managing Director at Duff & Phelps, who works closely with companies advising them on how to prepare and deal with funding issues, commented: “It is encouraging to see that over the past three months the percentage of companies saying that they found it very hard or quite hard to access funding has fallen to 24% from 33%. Challenger banks, or alternative lenders such as peer-to-peer lenders, have become more established as a source for funding among the business community. While this new and different range of funding options provides a welcome boost in liquidity, it is important that SMEs receive support and guidance to find the most appropriate funding structure for their businesses.”

Despite initial fears about the impact of the EU Referendum on international trade, 27% of businesses that have international customers noted that demand for their services and goods rose in the third quarter, while 57% reported that it remained the same, demonstrating the positive effect of the lower value of sterling for some businesses. The flipside for importers is that the cost of doing business has increased, through more expensive materials and services.

Steve Clancy, Managing Director at Duff & Phelps, commented: “Some SMEs that purchase goods or services from outside of the country and have not hedged on currency, like grocers or smaller manufacturers, have felt the immediate impact of currency fluctuations. Some savvy companies may have currency hedging in place. Unfortunately, a volatile or decreased value of Sterling could be the new reality. SMEs need to start thinking now about negotiating with their suppliers, managing overheads or passing on some of the higher costs for the longer term. On the upside, as UK products and services become more competitive, exporters should see a corresponding uptick in orders going forward.”

Media Relations

Vikki Kosmalska
Smithfield Consultants
+44 (0)20 7903 0679

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