Four years post-Brexit, a report from Bibby Foreign Exchange reveals a notable change in stance among UK SMEs, with more than half considering it a top challenge. Second only to inflation, the lasting legacy of Brexit has made importing and exporting goods more challenging, leading a fifth of respondents to call for a potential return to the EU.
Initially, post-2016, SMEs largely supported Brexit, anticipating opportunities amidst the challenges. However, recent findings suggest a different narrative. Bibby Foreign Exchange’s survey of 500 UK SMEs engaged in international trade reveals that 45% feel Brexit’s impact has been more significant than expected, with 55% citing it as a significant challenge, ranking just below inflation.
The cost of trading with the EU has surged for 49% of respondents, leading to decreased profitability. Tariffs, customs, and trade barriers have become key concerns for 40% of SMEs, reflecting a souring mood surrounding Brexit. Comparing this sentiment to 2017, the negative impact of Brexit uncertainty has risen from 41% to 62% for importers and from 29% to 63% for exporters.
Managing Director of Bibby Foreign Exchange, Michael McGowan, emphasises that despite SME resilience, many are struggling to operate as effectively as before Brexit. The complexity of customs and clearance processes, compounded by new post-Brexit border checks, intensifies the challenges faced by SMEs.
Furthermore, the report highlights political implications, with only 26% of SMEs supporting the Conservative party in a potential 2024 election. Notably, 20% express a desire for a new government to consider rejoining the EU, indicating a shift in political preferences among the SME community.
As UK businesses adopt a pragmatic approach by seeking non-European partnerships, the report emphasises the clear appetite among SMEs for closer ties with the EU. Failure to prioritise and address the concerns of small and medium-sized businesses trading overseas could lead to significant losses for individual businesses and national economic growth, warns McGowan.