Just over a quarter (26%) of businesses in Wales and the South West of England are concerned about the potential impact Brexit will have on their suppliers and customers, according to new research indications from the Welsh branch of the insolvency and restructuring trade body R3.
The research, which was carried out for R3 by BVA BDRC, found that more than a fifth (22%) of survey respondents in Wales and the South West of England have reviewed the potential impact of Brexit on their suppliers and customers and are ‘somewhat concerned’, while nearly one in twenty (4%) further businesses are ‘very concerned’.
The research also indicates that just under a quarter (24%) of Welsh and South West businesses have yet to review the potential impact of Brexit on their supplier and customer network.
R3’s Philip Winterborne, a partner at Temple Bright solicitors, said:
“It’s a serious worry that so many regional businesses may feel exposed to a supply chain risk as a result of Brexit.
“A key part of preparing for Brexit is looking at how it affects your suppliers and customers. It’s all very well making sure your own business is ready to adapt, but these plans might not help if the businesses you depend on – customers and suppliers – are unprepared.
“The proportion of regional businesses that may be sticking their head in the sand over Brexit is also sizeable. Businesses that fail to understand how Brexit may affect their supply chains are at risk of sleepwalking into trouble.”
More positively, the R3 research indicates that nearly two fifths (38%) of businesses in Wales and the South West of England have reviewed the impact of Brexit on their suppliers and are either ‘somewhat reassured’ (24%) or ‘very reassured’ (15%).*
Philip Winterborne continued:
“It’s encouraging that a solid proportion of regional businesses have checked how their suppliers and customers are preparing for Brexit, and that they are reassured by what they’ve found. It’s still a minority of businesses that are in this position, however.
“R3 cannot stress enough how important it is that businesses seek professional advice if they are unsure about how Brexit will affect them or their supply chain.”
Across the UK, over a fifth (23%) of businesses employing up to 49 people said that they hadn’t reviewed the potential impact of Brexit on their suppliers or customers, compared to just 3% of companies employing over 250 people.
Of the four broad UK sectors covered by the research (manufacturing, construction, retail, and services), the sector in which businesses were least likely to have reviewed the potential impact of Brexit on their suppliers or customers was the construction sector (18% of businesses had not carried out a review). By contrast, only 11% of businesses in the manufacturing sector had not carried out a review.
Of the businesses surveyed, those in the manufacturing sector were most concerned by what they found; 37% were either ‘somewhat’ or ‘very’ concerned, compared to 40% who were ‘somewhat’ or ‘very’ reassured. Companies in the retail sector were most likely to be reassured by their review (46% were in this position, compared to 28% who had concerns).