Agents’ survey on preparations for EU withdrawal - 2019 Q2

This box summarises the results of the Agents’ survey of almost 300 business contacts about their preparations for EU withdrawal.
Published on 20 June 2019

The survey was conducted between 23 April and 28 May.1 The survey indicated that the extension of the EU withdrawal period to the end of October had done little to change respondents’ views about the economic outlook.

Around three-quarters of respondents, weighted by employment, reported no change in uncertainty about the economic outlook as a result of the extension (Chart A). 

Chart A Companies remain uncertain about the economic outlook

Effect of Brexit extension on uncertainty (a)

Box-1-Chart-A
(a) Businesses were asked ‘Are you more or less uncertain about the economic outlook now than you were prior to the extension of the EU withdrawal deadline to the end of October 2019?'.

Around a tenth of respondents felt that uncertainty had increased and less than five percent felt that the outlook had become less uncertain. The findings are consistent with the results of the latest Decision Makers Panel survey (Box 2).

The results were also broadly similar across sectors, but small companies were more likely than larger businesses to report that uncertainty had increased.

Companies expected output growth to remain positive relative to a year ago over the period to the end of October. Investment intentions were marginally positive, consistent with subdued investment spending in the near term. Employment growth was expected to be only slightly positive.

When asked how the extension had affected contingency planning, around half of all respondents said they would maintain their contingency plans over the extension period, and around one quarter of respondents said they would do more contingency planning ahead of the 31 October deadline (Chart B). Nearly 90% of all respondents said they had implemented some form of contingency plan.

Chart B Most firms have contingency plans for Brexit

How the Brexit extension has affected plans (a)

Box-1-Chart-B
(a) Businesses were asked ‘How has the Brexit extension affected your contingency plans?’

Around one in ten businesses said they had no contingency plan and did not expect to develop one. This was more likely to be the case for small and medium-sized companies than for large businesses.

In terms of their readiness for EU withdrawal, companies tended to report that they would be ready for Brexit “in whatever form that takes” by the 31 October deadline, although most said that they would be “as ready as they can be” – consistent with previous Agents’ reports. Companies remained uncertain about the future trading relationship with the EU and potential developments in the sterling exchange rate, which limited the extent to which they could feel fully ready. 

Of the around 40% of respondents that said they had built up stocks in the run-up to the end of March, the majority said that they would maintain them, although around a third said they would run them down in the near term. This suggests that stockbuilding is likely to detract from Q2 GDP growth.

  • 1. There were 283 responses from companies with 276k employees and a combined turnover of £63bn. Responses were weighted by employment and then by sector.

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