Brexit- and- Bust or Brexit- and- Boom

Andy Moylan, Managing Director of EFCIS and, founder of The Export Hub challenges the negative Brexit mindset which he attributes in part to negative media coverage.

I don’t think I’m alone in venting my exasperation at the overwhelmingly negative coverage of BREXIT as it gathers momentum. One negative story after another is the news lock stock and barrel. It’s wearying; what would appear to be negative speculation conducted by journalists intent on talking down the British economy; arguing the toss with politicians and pointing to the snake like queue of businesses poised to leave the UK.

So I’d like to take you on a different journey altogether by presenting a smattering of the many positives that receive little or no coverage.

  • Public finances? We had a healthy surplus in January.
  • Italy is in recession and there are less than favourable performance reports on the economies of Germany and France. The UK? Employment levels are at a two year high as is UK manufacturing, now officially in the expansion zone.(According to The Spectator, the reason why the Italian economy is in such dire straits is ‘because it is shackled by the euro, whose exchange rate is disproportionately influenced by economic conditions in Germany and which, as a result, cannot fall so as to make Italian products more competitive’)
  • British start ups raised just short of £8 billion during 2018 in venture capital. Staggeringly this is 70% more than start ups in Germany and France.

There’s more.

  • Forbes magazine has just described the UK as “The best place in the world to do business”, two years in a row. It judges 153 countries on 15 factors including property rights, innovation, taxes and red tape. The UK scored particularly high on technological readiness (fourth) and the size and education of its workforce (third).
  • According to the London School of Economics: ‘Most surveys since the Brexit vote point to the likelihood of buoyant post-Brexit FDI (Foreign Direct Investment). For example, the annual business survey conducted for the World Economic Forum by PwC found the majority of the UK’s CEOs to be very positive about the UK’s prospects. A recent survey by Colliers International found that London is set to remain the most attractive location for FDI among 20 world cities. And the title of this article?

Foreign direct investment will remain robust post-Brexit

  • Surveys of investors show that EU membership tends to feature low down the list of important factors that affect investment.
  • The UK also has many advantages that will be unaffected by Brexit such as the English language, light regulation, highly developed capital markets, strong rule of law, and flexible labour markets
  • The CEO of Norwegian’s £753 billion sovereign wealth fund has confirmed that not only will it boost its UK holdings; it will increase the UK allocation over time. It has no worries about Brexit. Interestingly Yngve Slyngstad CEO said: “With our 30 year plus time horizon, current political discussions don’t change our view.” (Oslo- Reuters)
  • In October 2018, Boeing opened a production facility in Sheffield – its first manufacturing site in Europe. The £40 million, 6,200-square-metre facility is located on Sheffield Business Park, in South Yorkshire.
  • IHS/Markit has published its monthly Purchasing Managers’ Index (PMI) for manufacturing. This is a measure of business activity which leads official government statistics on the economy. The survey takes data on economic activity straight from businesses, distilling it to a single score between 0 and 100. Anything over 50 = economic expansion; anything under 50 = contraction. The PMI for UK manufacturing in December rose to 54.2, up from 53.6 in November, beating the forecasts of most economic commentators. Meanwhile, the PMI for Eurozone manufacturing fell to 51.4 in December, from 51.8 in November. France came in at 49.7, Italy at 49.2, Germany = 51.5. Only Ireland at 54.5 and the Netherlands at 57.2 have faster-expanding manufacturing sectors than the UK.

Could it just be that the Eurozone is not all it’s cracked up to be and Mr Tusk may have got carried away with his rhetoric on the special place in hell?

Crucially despite the harbingers of doom the UK post Brexit is an attractive place to grow your business and to develop your export plan.  I firmly believe that once freed from the EU we can swiftly move on to seeing the myriad of opportunities more clearly.

In my next article I focus on the emerging markets outside of Europe; countries with an appetite for goods and services made from British companies. In the meantime I’d like to share a quote I use when speaking at business events.

“90% of future growth will be outside of the EU and Brexit means Britain can benefit.” Liam Fox, The Times January 24 2018

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