In the wake of last year’s vote for Brexit the United Kingdom’s Economic outlook is gloomier, which is translating into a smaller number of entrepreneurs starting their own business.
Last year we reported that high levels of uncertainty and weakening business confidence resulted in 13,000 fewer businesses starting up during the three months following the referendum for Brexit.
The negative impact of Brexit on the number of Business Start-ups across the country continued as the invocation of Article 50 to leave the EU and the calling of a snap general election caused further drops. In the days following these announcements the number of start-ups fell by 8,500. Just 34,400 new businesses started up in April 2017; at no stage since the onset of the financial crisis ten years ago have April start-ups levels been so low.
The table below shows the dampened level of business starts since the start of 2016:
Of course, understanding the economic landscape is much more nuanced than simply pointing the finger at Brexit.
There are often fewer opportunities for entrepreneurial activity when the labour market is robust. Indeed, employment levels are currently high and the unemployment rate has fallen to a 42-year low of just 4.4%.
As the Brexit negotiations progress and business confidence weakens the economy is likely to grow more slowly. According to the latest HSBC Economic Update, Third Quarter, 2017, this is “expected to reverse some of the recent strength of the labour market, but any rise in unemployment will probably be fairly modest”. Thus, the opportunities for the number of business starts picking up through unemployment necessity is likely to be subdued in the coming months.
Simon Anderson, Managing Director of BankSearch, said: “Given the robust labour market and the ongoing uncertainty surrounding Brexit negotiations it’s only natural for would be entrepreneurs to be cautious about taking the first step in starting up their business.
However, there is a lot of support and advice available to help businesses start and grow; and with plenty of worldwide opportunities now is the time for UK companies to take the plunge and benefit from the global exporting drive. If you are interested in starting up your own business a good place to begin is to contact your local council economic development officer or Growth Hub, who can point you in the right direction.”
14th September 2017